Investing.com - The pound was steady close to 14 month lows against the dollar on Tuesday, as demand for the greenback continued to be underpinned by expectations that the U.S. recovery will outstrip that of other major economies.
GBP/USD was trading at 1.5843, unchanged for the day and not far from Friday’s low of 1.5786, the weakest since September 2013.
The dollar slid in the previous two sessions after Friday’s softer than expected U.S. jobs report prompted a bout of profit taking to lock in gains after the greenbacks recent run higher.
The dollar has rallied over the past two months as broadly stronger economic data fuelled expectations that the Federal Reserve will raise interest rates sometime in 2015.
In contrast, central banks in Japan and the euro zone are likely to ease monetary policy further amid efforts to spur growth and combat persistently low levels of inflation.
The US dollar index, which tracks the performance of the greenback against a basket of six major currencies, was up 0.20% to 88.04, not far from Friday’s four-and-a-half year peaks of 88.31.
In the U.K., investors were looking ahead to Wednesday’s quarterly inflation report from the Bank of England for further indications on the future possible direction of monetary policy.
Surveys of the U.K. service and manufacturing sectors last week added to worries that the rate of the economic recovery is slowing, prompting investors to push back expectations for a rate hike.
Elsewhere, sterling was fractionally higher against the euro, with EUR/GBP dipping 0.08% to 0.7833, not far from last Thursday’s five week lows of 0.7798.