LONDON, March 5 Reuters The British pound lost ground against a resurgent dollar on Friday, as currency traders took some risk off the table amid rising U.S. bond yields.

U.S. Federal Reserve Chair Jerome Powell failed to soothe investor concerns about a recent surge in borrowing costs as he spoke at a Wall Street Journal forum on Thursday, pushing the safehaven dollar higher.

Sterling fell to a threeweek low against the dollar, down 0.5 at 1.3825.

The pound had reached as high as 1.42 last month its highest level since 2018 as optimism built about Britains swift introduction of COVID19 vaccines and expectations of a robust economic recovery.

The dollar is rebounding along with longer term U.S. yields, which is triggering a reversal of trades including for the pound, said Lee Hardman, currency economist at MUFG.

But the fundamentals are moving in a positive direction for the pound with the vaccine rollout and growing hopes of a recovery. The pound should strengthen after this nearterm correction.

Analysts said British finance minister Rishi Sunaks budget plan for the economy this week, which included a further extension of pandemic stimulus packages and some tax rises, could also ultimately strengthen the pound.

This should keep fiscal policy loose, which should keep the Bank of England in a hawkish mood while expecting a robust economic recovery in the next few months. This mix should keep supporting sterling beyond 1.40, said Gaetan Peroux at UBS.

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