* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv
(Updates prices, adds chart)
By Elizabeth Howcroft
LONDON, Aug 31 (Reuters) - The pound extended gains on
Tuesday to a two-week high against the dollar, which weakened
after U.S. Federal Reserve Chair Jerome Powell did not signal a
timeline for a policy shift, though sterling also fell to a
one-month low against the euro.
At the Jackson Hole economic conference on Friday, Powell
offered no indication about when the central bank planned to cut
its asset purchases beyond saying it could be "this year." The
comments knocked the dollar and pushed up the pound.
Sterling extended these gains on Tuesday as the dollar fell
further. At 1135 GMT, the pound was up 0.2% at $1.37865, having
reached above $1.38 for the first time since Aug. 17 earlier in
Versus the euro, it was down 0.2%, at 85.91 pence per euro -
its weakest in a month. The euro was at a one-month
high against the dollar.
Risk appetite was steady, as European stocks shrugged off
fresh signs of an economic slowdown in China.
Investors are looking to U.S. jobs figures later in the week
for clues on when the Fed might taper its bond buying.
ING FX strategists wrote to clients that a light data
calendar in Britain and lack of Bank of England speakers meant
that cable had followed euro-dollar's move higher this week.
"A break above 1.3800 this week should, if anything, be
driven solely by USD weakness, while EUR/GBP looks likely to
keep trading within its recent narrow range for now," ING said.
Earlier this year, Britain's pace of COVID-19 vaccinations
and a broader reflation trade in global markets allowed the
pound to be the best performer among its G10 currency peers, but
it has since lost that lead.
Speculators' net position on the pound versus the dollar
fell further into negative territory - meaning there are more
bets on the pound falling - in the week to Aug. 24, according to
weekly CFTC positioning data.
The net short position is at its biggest since November
"The list of headwinds for GBP is growing," said Nomura
analyst Jordan Rochester in a note to clients on Friday, citing
rising British COVID-19 infections and "high-frequency growth
indications turning lower."
(Reporting by Elizabeth Howcroft; Editing by Edmund Blair and
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