Sterling ended flat against the dollar after US jobs data on Friday and slightly up on the euro, as investors focused on whether the Bank of England will stick to its loose monetary policy at next week's meeting. Trade was choppy as the US employment report showed 216,000 jobs were lost in August, slightly fewer than expected, but the unemployment rate up to a 26-year high of 9.7 percent.
Sterling initially held gains against the dollar before falling to day's lows as investors adjusted positions before a long weekend in the United States where markets are shut on Monday for a public holiday. "It was an ambivalent reaction," to the US data from sterling, said Geoffrey Yu, a currency strategist at UBS.
Sterling fell almost one cent against the dollar immediately after the jobs data to $1.6288, pulling further away from a one-week high of $1.6415 the previous session on news the UK services sector grew at its fastest pace in almost two years. But it retraced some of these losses and at 1525 GMT was flat on the day at $1.6330.
The euro fell 0.2 percent on the day to 87.05 pence by 1448 GMT, its lowest in over a week as speculation mounted on whether the BoE will pause its asset purchase programme at 175 billion euros when policymakers meet next week. The BoE is widely seen keeping interest rates unchanged at a record low 0.5 percent leaving investor focus on whether it will stick to its ultra loose monetary policy going forward. "We still feel that the quantitative easing process from the Bank of England is at the start of a winding down process," said Adam Cole, global head of currency strategy at RBC Capital Markets.