Dollar Retreats After Early Gains

The dollar touched another 3-1/2-year high against the mark Thursday before retreating to end mostly lower on surprisingly weak U.S. jobs data and selling ahead of the three-day July 4 weekend. The pound surged for the fourth straight day.

Traders said the British currency was likely to keep strengthening on the widening expectations that interest rates in Britain must rise, perhaps as early as the Bank of England’s policy-making meeting next Thursday, to thwart inflationary pressure in the country’s vibrant economy. Rising rates tend to enhance a currency’s value.

Demand for pounds intensified Wednesday after Britain’s new Labor government unveiled a budget that was far less austere than expected.