By Lawrence White
LONDON -Sterling rose to a three-week high on Friday after data showed the U.S. economy created the fewest jobs in seven months in August, casting doubt over the timing of the Federal Reserve’s plan to scale back its bond buying scheme.
Investors had been primed for more than double the 235,000 jobs actually created in August, but rising COVID-19 cases have crimped the economic recovery, further subduing the dollar.
Other details in the Labor Department’s report were strong enough to suggest the Fed could yet proceed in November as planned, analysts at Goldman Sachs said.
At 1500 GMT, the pound was up 0.3% against the dollar at $1.3874 , a level last seen on Aug. 16.
The dollar index fell to its lowest since Aug. 4.
Sterling also edged up 0.1% against the Euro.
Trading in the pound had been listless this week in the absence of major British economic data or policymaker speeches.
The speed of Britain’s COVID-19 vaccination programme had contributed to the pound being the best performer among G10 currencies this year, but it has since lost that crown with some potential clouds on the economic horizon.
Those included slowing credit card spending, fewer positive data surprises and rising virus cases among the elderly, analysts at Nomura said.