Sterling was flat against the greenback, at US$1.2760, as the spotlight stayed on the US nonfarm payrolls report for November, due later in the day, with payrolls expected to have increased by 200,000 last month.

The pound dropped from a 1-1/2-year high in October as the US jobs market roared ahead and fell further in November as the re-election of Donald Trump boosted the American currency.

But if this week’s gains hold, the pound will see its second week of strengthening versus the dollar.

“UK politics is relatively quiet now compared to continental Europe and the States,” Chris Turner, global head of markets at ING said.

The pound was flat against the euro today, at 0.82 pence per euro, but tracked a third week of gains against the single currency.

Political turmoil in France lead to a wobbly week for the euro, with President Emmanuel Macron saying he would appoint a new prime minister in the coming days after Michel Barnier’s minority government collapsed.

However despite a volatile week, the euro was on track to post a second weekly gain versus the dollar.

“UK rates are continuing to be priced closer to Fed rates than ECB rates,” said ING’s Turner, adding that meant the market traded sterling more on a par with the dollar than the euro at the moment.

Markets are largely pricing in that the Bank of England will hold rates unchanged at its next meeting on Dec 19.

“We think the UK data, particularly services inflation, might not break low until early next year,”

“So February might be the earliest chance to see some sort of independent sterling weakness coming through,” Turner said.