LONDON: Britain’s pound steadied against the dollar on Friday, recovering from two-month lows after a print of US jobs data pushed the dollar lower.
Earlier on Friday, sterling hit fresh two-month lows against the dollar, pressured by dovish comments from the Bank of England’s governor.
In his annual Mansion House speech on Thursday, Andrew Bailey said it was important to ensure that the recovery was not undermined by a premature tightening in monetary conditions, as a rise in inflation was likely to be temporary.
Bailey’s comments knocked the pound to its lowest since April 16, and the currency hit a fresh low of $1.3745 in morning deals in London.
But after the dollar was weighed down by some weaker details in an otherwise strong overall US jobs report, sterling recovered some ground to trade 0.15% higher at $1.3782 by 1430 GMT.
Against the euro, it traded 0.2% higher at 85.94 pence.
ING noted that unlike US interest rate futures markets, sterling markets are in the process of handing back hawkish pricing seen in late June.
Money markets were earlier pricing a 10 basis point BoE rate hike in May 2022.
Sterling was one of the worst-performing G-10 currencies last week after the BoE kept the size of its stimulus programme unchanged and said inflation would surpass 3%, but that the climb further above its 2% target would be only temporary.
The pound found some support against the euro this week on the European Union decision to extend by three months an exemption on customs checks on chilled meat shipments to Northern Ireland.—Reuters
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