Sterling fell towards the previous day's one-month low against the dollar on Friday, staying soft on expectations UK interest rates will remain on hold for the rest of the year.
Hawkish comments from Federal Reserve officials this week have cemented expectations of a US rate hike this month.
In contrast, a run of tepid UK data - including an unexpected fall in April manufacturing and industrial output reported on Thursday - have quashed expectations for a Bank of England rate rise this year from the current 4.5 percent.
"I think sterling will probably remain under a little bit of pressure. Our sense is that the market is still overestimating the likelihood of a tightening by the Bank of England. The data this week has been a bit on the soft side on the production front," said Tim Fox, FX strategist at DrKW.
Sterling fell to session lows of $1.8369, close to Thursday's one-month low - after US data showed that the trade deficit widened less than expected in April and import oil prices surged close to historical highs.
By 1405 GMT it had recovered a little to trade at $1.8455.
Friday's UK data showed a global trade deficit of 5.75 billion in April, little changed from March.
Against the euro, sterling held steady at 68.60 pence. The euro fell sharply against the dollar on Thursday after the European Central Bank raised rates by 25 basis points, - less than some expected - and hinted that the pace of monetary tightening is unlikely to pick up in coming months.
Next week in Britain sees the publication of May producer prices data on Monday, consumer prices on Tuesday, unemployment on Wednesday and retail sales on Thursday.
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