Sterling jumps vs euro, slips vs dollar in thin July trade

Wads of British Pound Sterling banknotes are stacked in piles at the Money Service Austria company’s headquarters in Vienna, Austria, November 16, 2017. REUTERS/Leonhard Foeger

LONDON, July 5 (Reuters) – Sterling fell on Tuesday against a strengthening U.S. dollar but jumped against the euro in July thinned trade with markets watching for any sign from the Bank of England on its monetary policy path.

With some liquidity expected to return to the foreign exchange market later in the day after a U.S. long bank holiday, the pound fell 0.4% against the dollar to $1.2051, marching towards a two-week low of $1.1976 hit on Friday.

Against a weakening euro, sterling rose 0.6% to 85.47 pence, its highest level since June 17. The euro slumped 1% to a two-decade low of $1.0306 against the dollar as the latest surge in European gas prices added to worries about a recession.