Sterling rose against the dollar on Friday as investors booked profits on the US currency's rally the previous day, but gains were capped by concerns the global economic outlook is worsening, which kept the pound near a one-year low. Against the euro, sterling hit a session high as the single currency was sold off on escalating speculation that Greece may not be able to secure more European bailout funds, increasing the possibility that it may default on its debt.
Sterling bounced after broad, heavy selling pushed it to a record low versus the yen on Thursday, when concerns about the global slowdown and a deepening eurozone debt crisis triggered a wave of selling of riskier assets, including the pound, for the perceived safety of the dollar and the yen. The pound traded 0.7 percent higher on the day at $1.5440, having climbed to as high as $1.5482. It clawed back some losses after it slumped to $1.5326 on Thursday, its weakest since September 2010.
The euro slipped 0.6 percent to 87.13 pence, after the single currency wiped out earlier gains against the dollar to trade slightly lower on the day. Further losses were limited by major technical support at 86.65/75, which contains the euro's 200-day moving average along with the 55- and 100-week moving averages. Sterling rose 0.7 percent to 117.80 yen, pulling away from around 116.70 yen hit on Thursday, its weakest level ever according to Reuters charts.