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UPDATE 2-Sterling scales $1.27 as investors prepare for Brexit debate


Sterling jumped on Friday after suffering heavy losses spurred by fears of a global economic slowdown, but uncertainty about Brexit kept its gains in check.

The pound sank to its lowest since April 2017 on Thursday after worries about the health of the global economy and particularly China sparked an investor exodus from currencies considered riskier.

The currency staged a recovery on Friday, trading up 0.6 percent against the dollar to $1.2722, but still close to the bottom of its long-term range.

Versus the euro, it also rose 0.6 percent to 89.66 pence.

Traders said the pound was helped by broad dollar weakness.

The greenback fell despite U.S. job growth surging and comments from Federal Reserve Chairman Jerome Powell that the central bank will be sensitive to market concern about a U.S. economic slowdown.

The pound edged up earlier after a survey showed Britain's dominant services sector rose slightly more than forecast.

Friday's data also indicated that disarray over Brexit is starting to affect the economy and the housing market is stalling.

"Economic data is unlikely to help GBP much these days. Sterling is chiefly driven by Brexit uncertainty," ING FX strategist Petr Krpata said.

Reduced expectations for a Bank of England interest rate rise in 2019 are also weighing on the pound, as are concerns about whether British Prime Minister Theresa May can convince lawmakers to back her Brexit withdrawal arrangement before a scheduled departure date in March.

A parliamentary debate on May's deal with Brussels kicks off next week, with a vote scheduled for the week of Jan. 14. (Reporting by Tom Finn; Editing by Angus MacSwan and Andrew Heavens)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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