Sterling rose on Friday against a weakening dollar ahead of U.S. jobs data due later in the day, while local elections in Britain have left the currency undisturbed.

Markets are focusing on U.S. nonfarm payrolls data due at 1230 GMT for clues on when the Federal Reserve might cut rates after Fed Chair Jerome Powell told reporters this week that interest rates might have to remain elevated for longer but shot down talk of raising them again.

In Britain, the opposition Labour Party won a parliamentary seat in Blackpool South and control of several councils, inflicting heavy losses on the governing Conservatives.

The thumping victory, which set the tone for two days of local results before a national election this year, left sterling undisturbed.

The pound was last 0.15% higher against the dollar at $1.2555.

The BoE is widely expected to keep interest rates unchanged at 5.25% on Thursday, but with inflation slipping back towards target, a rate cut at the following meeting might be put on the table.

Markets see now a 65% chance of a BoE cut in June, according to LSEG data.

In the meantime, British services companies reported the strongest upswing in activity in almost a year during April, despite a new surge in cost pressures, according to a survey that will be watched by BoE policymakers.

Against the euro, the pound was little changed at 85.60 pence .

Source : Reuters