Sterling recovery derailed by U.S. jobs numbers
By Patrick Graham
LONDON Aug 5 (Reuters) - Sterling sank towards $1.30 on Friday, its weakest in three weeks, after stronger-than-expected jobs numbers in the United States strengthened speculation U.S. interest rates would rise this year.
The pound gained 0.15 percent to 84.76 pence per euro and had looked to be recovering after the Bank of England announced a package of new stimulus measures for Britain's slowing economy on Thursday, driving sterling to its biggest daily losses in a month.
But an hour after the U.S. numbers, it was trading half a percent lower on the day at $1.3037, having touched a three-week low of $1.3021.
"The key point for us after this data is that the U.S. side of the equation has not so far come into play on sterling," said Sam Lynton-Brown, a strategist with BNP Paribas in London.
"Given our more hawkish view that the Fed will deliver a rate hike in September, we think there is a lot of room on the downside and target $1.24 in cable."
The Bank of England's cuts on Thursday in its growth forecasts for next year and its hints of more easing to come underline the central case bank analysts have made for the pound to weaken since June's vote to leave the European Union.
But with bets against sterling already at their highest on record, weakening the currency has proved difficult for speculative investors over the past month. It remains more than 2 cents above lows hit in early July.
Deputy Governor Ben Broadbent said on Friday the pound's drop after the Bank of England's decision was "relatively small" compared with its fall after the Brexit vote. Continuación...