Oct 1 Reuters Sterling dipped against a firming dollar on Tuesday as survey data confirmed a slowdown in factory activity in September, but the British currency was still in sight of recent highs.

The pound was down 0.4 at 1.33280 a day after closing out its strongest quarter in two years alongside a broader improvement in risk appetite. It hit a more than twoyear high against the greenback just last week.

But the dollar was firmer across the board on Tuesday, after Federal Reserve Chair Jerome Powell pushed back against bets on more supersized interest rate cuts.

The centrepiece of this week for markets is the U.S. jobs due on Friday, which will offer clues about the health of the world39;s biggest economy and the trajectory of Fed policy.

In the mix in Britain, the SP Global UK Manufacturing Purchasing Managers39; Index slipped to 51.5 in September, unchanged from a preliminary estimate, as British manufacturers worried about the new government39;s first budget.

Sterling was flat against the euro, at 83.26 pence to the common currency, a day after firming to its strongest since April 2022.

Weighing on the euro were rising expectations of European Central Bank policy easing in October on top of an alreadypriced December cut, after soft inflation prints and data showing manufacturing activity across the euro zone declined at its fastest pace this year in September.

In contrast, stubborn British inflation has fuelled bets of slower monetary policy easing in the…