Pound drops against dollar as US jobs data dash rate cut hopes

The pound plunged 0.5% to $1.272 against a rising dollar and UK government bonds fell after the release of strong US jobs figures.

Yields on two-year and 10-year gilts climbed to 4.375% and 4.26% on news the US economy added 272,000 jobs in May, well ahead of the 180,000 forecast, while unemployment ticked up to 4%, according to the Bureau of Labor Statistics.

Amid a retreat in Europe, the FTSE 100 continued to trade 0.3% lower, closing at 8,259, putting it down by the same amount over the week.