Pound tops $1.28 as subdued US jobs figures dent the dollar

The pound rose back above $1.28 as weaker-than-expected US jobs data dented the dollar.

Sterling hit its highest level for almost a month and made gains against the euro after US government figures showed non-farm payrolls, a closely watched employment measure, rose 209,000 in June – less than the 225,000 expected by analysts.

Data for April and May was revised down by 110,000, suggesting the US is not creating as many jobs as thought.

The figures suggested the Federal Reserve may not need to raise interest rates as far as expected to bring inflation back under control – pushing the dollar lower. 

But with unemployment falling to 3.6 per cent, analysts said the Fed was likely to hike interest rates again this month.

Stan Shipley, senior economist at Evercore, said the latest jobs report ‘suggests the economy is OK, but not booming in the way it was six months ago’.

He added: ‘The Fed will probably still hike in July.

‘The question is about the Fed meetings after July.’