Sterling pared gains against the dollar on Friday as a weaker-than-expected US jobs report left investors more averse to risk and offset the boost to the UK currency from the previous day's Bank of England decision. However, the pound stayed not far from a two-week high against the dollar hit after the central bank on Thursday increased its quantitative easing programme by 25 billion sterling, less than the 50 billion rise many had forecast.
The top-up to QE broadly supported sterling, particularly as many in the market believe this will be the last. But the pound pared gains after closely-watched US data showed the economy lost 190,000 jobs in October, slightly more than forecast, while the jobless rate rose to a 26 1/2 year high of 10.2 percent from 9.8 percent.
"People went into the US jobs numbers in a positive frame of mind and they leapt on the unemployment rate, given concerns about the psychological impact of this number on consumer confidence," said Gavin Friend, currency strategist at nabCapital.
By 1512 GMT, sterling edged down 0.1 percent against the dollar to $1.6577, though it was still not far from $1.6637 hit on Thursday, its highest since October 23. The pound dipped against the euro with the single currency up 0.2 percent at 89.85 pence. Sterling is poised to end the week little changed against the euro and up around 1 percent against the dollar.
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