Sterling gave up gains against the dollar on Friday, as investors booked profits on a move higher in riskier currencies after better-than-expected headline US jobs data with a gloomy UK economic outlook also weighing on sentiment. US employment growth picked up speed in November and the jobless rate dropped to 8.6 percent from 9 percent, further evidence an economic recovery was gaining momentum.
Sterling was down 0.4 percent against the dollar at 1.5627, falling past support at $1.5637-the previous day's low. It had risen to $1.5721 from around $1.5707 immediately after the US jobs numbers were released, not far from a its peak of $1.5780 hit on Wednesday, when joint central bank action to inject liquidity into the global financial system encouraged investors to sell the safe-haven dollar.
"Those US jobs number gave the euro and the cable a leg up, but now we are seeing some dollar buying," said a London based spot trader. "It is perhaps shuffling of positions ahead of the weekend, but it could also be due to higher US yields." Against the euro, sterling cut losses.
The euro was last up 0.1 percent against the pound at 85.87, off a session high of 86.20. Traders cited demand from a French bank and said there were stop loss orders above 86.20 pence. Downside support was seen coming from the 21-day moving average around 85.74. The single currency got a lift from a Bloomberg report which said the European Central Bank may lend to weak eurozone countries via the International Monetary Fund.