Sterling rally comes to end as dollar rises

The pound lost ground yesterday – a day after rallying on the back of Brexit rumours – as strong US jobs growth buoyed the dollar.

Sterling was trading 0.23% down at 1.296 US dollars, after new data showed that the US economy added an unexpectedly high number of new jobs in October, as well as strong wage growth.

The pound was flat against the euro at 1.139.

But the currency still held on to most of the gains it made during Thursday’s rally, which was prompted by reports of an imminent Brexit deal for the UK’s financial services.

David Madden, market analyst at CMC Markets, said it was “encouraging” to see sterling’s resilience.

“The uncertainty surrounding Brexit is still hanging over the currency, but the mood has lightened a little,” he said.

The FTSE 100 closed 20.54 points, or 0.29%, lower at 7,094.12, losing some gains from earlier in the day as the US market opened.

In Europe, the French Cac was 0.32% higher and the German Dax rose 0.44%.

The strong jobs data in the US weighed on Wall Street as it stoked fears of higher borrowing costs, while Apple’s disappointing forecasts further dampened the mood.

US President Donald Trump also raised hopes that a fullblown trade war with China will be avoided, leaving oil prices flat amid the mixed bag of news.

A barrel of Brent crude was trading 0.05% lower at $72.68.