Sterling leapt three quarters of a percent against the dollar on Friday following weaker than expected US employment data, but fell to eight-month lows against the euro on the British interest rate outlook.
US non-farm payrolls rose by a smaller than expected 96,000 in September, compared with forecasts of a 148,000 increase.
The data knocked the dollar down by one percent against the yen, euro and Swiss franc and also weakened it against sterling.
Sterling underperformed the euro due to ebbing expectations of further British rate rises, following five rounds of rate increases since last November. The Bank of England left rates unchanged at 4.75 percent.
"This is essentially a dollar move," said Adrian Schmidt, currency strategist at RBS Financial Markets. "The dollar fell one big figure against the euro, and a bit less against sterling."
Sterling jumped as high as $1.7953, its best level since Monday, but edged back to $1.7930 by 1426 GMT.
It fell a third of a percent to 69.23 pence per euro, its weakest showing since late January.
Sterling also tested its lowest levels since January on its trade-weighted index.
Recent weak British data has strengthened expectations that the Bank of England may be at or close to the end of its current tightening cycle.
Further clues as to whether the cycle is near an end will come next week with the release of British producer price data for September and trade data for August on Monday, and September consumer inflation data on Wednesday.
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