Sterling surged more than two cents against the dollar on Friday as a surprisingly weak US jobs report sent the US currency tumbling across the board.
US employers added a paltry 21,000 workers to their payrolls last month, less than a fifth of what had been expected.
"The market was positioned for a very strong US number so there was a strong adverse reaction in the dollar," said Henry Wilkes, head of European foreign exchange at Brown Brothers Harriman.
Sterling stood at $1.8450 at 1520 GMT, up more than one percent on the day. The British currency has now recovered three cents after hitting one-month lows earlier this week and is moving back towards the 11-year highs at $1.9140 scaled last month.
Jobs have been the weak spot in the US economic recovery and the Federal Reserve is not expected to raise interest rates from their paltry 1.0 percent until job creation gathers pace. Unattractive yields on dollar assets have been a key driver of the greenback's two-year downtrend.
In contrast, British interest rates stand at 4.0 percent and are expected to head even higher in the coming months.
"There is certainly no reason to buy the dollar now," said Wilkes. "In Britain, data continues to be strong and interest rates are still expected to go higher."
The pound was half a percent weaker against the euro at 67.20 pence as Europe's single currency drew even greater benefit from the dollar's distress.
A newspaper report that Britain's Chancellor of the Exchequer Gordon Brown was being lined up as a possible new head of the International Monetary Fund provided much trading floor chatter but little currency reaction.
Britain's Treasury said the report was premature speculation.
Next week, British producer prices for February are due on Monday, and January industrial production data and February trade data are due on Tuesday.