Sterling dipped against the dollar on Friday after the release of generally dollar-friendly US data but the pound rose versus the euro, stepping away from 3-1/2 month lows hit this week. Stronger-than-expected US June industrial output and lower-than-expected US June producer price inflation helped boost the dollar across the board.
"It has really been confined to the dollar move subsequent to the US data," Bear Stearns currency strategist Steve Barrow said.
By 1407 GMT sterling traded down 0.17 percent against the dollar at $1.7528.
Comments from European Central Bank council member Nout Wellink suggesting he was against lowering eurozone interest rates had earlier helped to weigh on the dollar, along with media reports the Chinese could revalue the yuan next month.
Sterling traded up against the euro at 68.63 pence, stepping away from its lowest rate in 3-1/2 months at 69.13 pence hit this week after figures showed growing UK jobless claims.
"We'll probably see sterling fall a little bit further against the dollar next week, but euro/sterling could well backtrack from the 69 (pence) area," Barrow said.
The pound plunged to 19-month lows against the US dollar and four-year lows against the Canadian dollar last week after four bombs exploded on London's transport system and killed more than 50 people.
The attacks triggered concerns shoppers would stay away from stores because of safety fears and British department store firm John Lewis said on Friday its sales plummeted by up to 20 percent after the blasts.
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