LONDON, Sept 4 Reuters The pound rose on Monday, but remained in sight of August39;s twomonth lows, as traders continued to weigh up the outlook for sterling, which analysts think could be at risk for more weakness over the course of this month.

Data on Friday showed the U.S. economy generated more jobs than expected in August, but offered evidence that the labour market is starting to show signs of slowing, which dented the dollar and helped the pound post its best weekly performance in more than a month.

Sterling was last up 0.3 at 1.26265 on Monday. It is still showing a gain of 4.4 for the year so far, neck and neck with the Swiss franc for the title of bestperforming major currency against the dollar.

But it39;s far cry for the yeartodate gain of 8.6 that it showed just over two months ago.

Money markets show traders believe the Bank of England has at least one, if not two, more rate hikes in the pipeline.

The chances of a quarterpoint rise when the BoE meets on Sept. 21 are nearly 90, with another rate hike almost guaranteed in November too.

That is in sharp contrast to the U.S. market, where traders believe the Federal Reserve is unlikely to raise rates again for the foreseeable future, or the euro zone, where investors think there39;s a 5050 chance of a lone rate rise by the end of 2023.

Part of sterling39;s appeal this year has been the prospect of higher interest rates. If the BoE does raise rates twice more, Britain will have the highest interest rates…