FX round-up: Dollar bounce knocks sterling, euro lower

The pound reeled against the US dollar as a stronger-than-expected US jobs report for July prompted traders to take some profits off the table, although reactions to the fresh data from the Department of Labor was somewhat mixed.

For CMC Markets's David Madden, Friday's release merited the adjective "impressive".

"The single currency has gained so much ground versus the US dollar in 2017, trader were just looking for an excuse for take their profit," he added.

Cable saw the day out with losses of 0.72% at 1.3042 while the euro gave back 0.9% to 1.1762, with the latter having hit an intraday low of 1.1728.

Neil Wilson at ETX Capital on the other hand had a different take on Friday's price action.

"A lot of fuss over nothing. We've just seen wild gyrations in the market to a report that was pretty much as expected. The dollar jumped as the report was a little ahead of expectations but there is absolutely nothing in this that changes the dial on the Fed or inflation.

"These market moves look extremely kneejerk and at send time the dollar gains are being pared in short order," Wilson said.

Analysts at Danske Bank were closer to Madden's views, telling clients the data supported the US central bank's case for announcing the start of its balance sheet unwinding in September and for another hike in the Fed funds rate in December.

In turn, Mohammed El-Erian's take lay on the opposite side of the spectrum to all of the others, telling Bloomberg TV he was concerned by lacklustre wage growth in the States.

El Erian called for the White House to take action on infrastructure, tax reform and debt, saying the Trump administration could not rely on the central bank.

As of 1831 BST the US dollar spot index was up by a sizeable 0.82% to 93.56, but just off its recently reached lows of more than two years at 93.60.

Further afield, India's rupee was in focus with market chatter pointing out analyst talk of further gains for the South Asian currency in 2017.