LONDON: The British pound steadied against the dollar on Friday but was set for its fourth consecutive week of declines, as investors weighed the prospect of more interest rate cuts from the Bank of England (BoE) amid concerns about slowing global growth.

Sterling was flat against the dollar at $1.2754.

It fell to a more than five-week low of $1.2666 on Thursday but closed up 0.5% as the dollar side of the currency pair came under more pressure.

The pound’s recent fall has been triggered by volatile trading across global markets after soft US jobs data last week raised fears of an economic downturn and bigger interest rate cuts from the Federal Reserve.

The currency was already near a one-month low last week when the BoE cut rates for the first time since 2020 in a 5-4 vote that took borrowing costs down to 5%.

Money markets show traders are pricing in further rate cuts of 42 basis points (bps) from the BoE by the end of this year, compared to 46 bps a week ago and 56 bps priced in at the peak of the market turmoil on Monday.

Traders currently expect rate cuts of 103 bps from the Federal Reserve by the end of 2024.

Against the euro, sterling firmed for a third consecutive session to 85.59 pence. Euro/sterling touched a more than three month high of 86.25 pence at one point on Thursday.

“The huge gains of late July and early August mean that this is not surprising, but overall the new bullish view remains in place,” noted Chris Beauchamp, chief market analyst at IG.

“If the price holds the 200-day (simple moving average) then a rebound towards £0.86 may develop. A close back below 85 pence in coming weeks might signal that a lower high has been created.” The 200-day SMA is currently around 85.566 for euro/sterling.

Against the yen, the biggest mover in currency markets in recent weeks, the pound held steady at 187.83 yen, rebounding from its weakest level since January hit on Monday at 180.05 yen.