Friday 5 March 2021 7:04 pm

Pound sterling falls back to near $1.38 on US jobs data surprise

Pound sterling fell back to $1.381 tonight, down 0.6 per cent after stronger economic news from the US.

It came after jobs data in the US was better than expected and manufacturing output had risen 2.6 per cent in January.

The US economy added 379,000 new job roles in February, better than the 198,000 economists had predicted.

The undemployment rate dipped to 6.2 per cent.

Currency economist at MUFG Lee Hardman acknowledged the impact a strengthening dollar is creating.

“The dollar is rebounding along with longer term US yields, which is triggering a reversal of trades including for the pound,” he said.

Against the euro, sterling fell back to €1.159 down 0.16 per cent, despite optimism over the UK budget and the vaccine rollout.

Chief investment officer at UBS Gaetan Peroux explained the impact the steady pound was having.

“This should keep fiscal policy loose, which should keep the Bank of England in a hawkish mood while expecting a robust economic recovery in the next few months,” Peroux added.