Investors had this week bid up the pound, one of the best performing major currencies in 2018, to its highest level since the Brexit referendum in June 2016, in part because of growing expectations the BoE would increase rates next month to curb inflation.
But weaker than expected wage growth and inflation data this week encouraged Carney to tell the BBC on Thursday that the rate rise was far from certain and noting that there were other BoE meetings later in the year.
"Carney has moved the goalposts," said Jane Foley, an FX strategist at Rabobank. "The data from the UK has shown signs of weakness. There are signs we could be losing momentum."
Foley said Carney was correct to have cautioned the market but his comments raised questions about the BoE's forward guidance in February when it had signalled a rate rise was coming soon, and this underlined that investors should see rate moves as contingent on economic data.
The pound fell as much as 0.3 percent to a day's low of $1.4037, its lowest since April 6.
On Thursday, sterling slid close to 1 percent and the British currency is now down 1.35 percent for the week, barely holding on to gains for April, a month which is considered to be seasonally strong for the British currency.
Against the euro, however, sterling recovered slightly on Friday and traded up 0.1 percent at 87.58 pence per euro .
A seasonal rise in capital inflows into Britain from foreign companies paying UK shareholders dividends has boosted sterling during April in recent years.
Analysts said some speculative money had probably bet on that pattern repeating itself, and investors were now unwinding those positions, pushing the currency lower.
Hedge funds had amassed a $3.8 billion long bet on the sterling, its longest since June 2014, according to latest positioning data.
Michael Saunders, a member of the BoE's rate-setting Monetary Policy Committee who voted for a rate rise last month, said on Friday that rate increases should be gradual and not glacial.
Markets are pricing in a 45 percent chance of a 25 basis point rise in May, down from a near 70 percent chance before Carney spoke.
"Sensitivity to monetary policy speculation is likely to remain a key fundamental theme impacting the British Pound. If market expectations continue to deteriorate over higher U.K interest rates, sterling could be exposed to further downside risks," said Lukman Otunuga, research analyst at FXTM.
Economists, almost all of whom had predicted the BoE would act in May before Carney's Thursday interview, believe the vote on whether to increase rates next month will now be very close.
Progress during the next round of negotiations between Britain and the European Union over their divorce will also influence the pound.