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LONDON: The pound extended gains on Tuesday to a two-week high against the dollar, which weakened after US Federal Reserve Chair Jerome Powell did not signal a timeline for a policy shift, though sterling also fell to a one-month low against the euro.

At the Jackson Hole economic conference on Friday, Powell offered no indication about when the central bank planned to cut its asset purchases beyond saying it could be "this year". The comments knocked the dollar and pushed up the pound.

Sterling extended these gains on Tuesday as the dollar fell further. At 1135 GMT, the pound was up 0.2% at $1.37865, having reached above $1.38 for the first time since Aug. 17 earlier in the session.

Versus the euro, it was down 0.2%, at 85.91 pence per euro - its weakest in a month. The euro was at a one-month high against the dollar.

Risk appetite was steady, as European stocks shrugged off fresh signs of an economic slowdown in China.

Investors are looking to US jobs figures later in the week for clues on when the Fed might taper its bond buying.

ING FX strategists wrote to clients that a light data calendar in Britain and lack of Bank of England speakers meant that cable had followed euro-dollar's move higher this week.

"A break above 1.3800 this week should, if anything, be driven solely by USD weakness, while EUR/GBP looks likely to keep trading within its recent narrow range for now," ING said.

Earlier this year, Britain's pace of COVID-19 vaccinations and a broader reflation trade in global markets allowed the pound to be the best performer among its G10 currency peers, but it has since lost that lead.

Speculators' net position on the pound versus the dollar fell further into negative territory - meaning there are more bets on the pound falling - in the week to Aug. 24, according to weekly CFTC positioning data.

The net short position is at its biggest since November 2020. "The list of headwinds for GBP is growing," said Nomura analyst Jordan Rochester in a note to clients on Friday, citing rising British COVID-19 infections and "high-frequency growth indications turning lower".

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