(Reuters) – Sterling fell sharply on Thursday after the Bank of England Governor Andrew Bailey said the central bank could become “a bit more activist” on rate cuts, while simmering tensions in the Middle East kept the dollar supported.

Sterling was last down 0.75% at $1.3169 after hitting its lowest since Sept. 19 at $1.3156, as gilt yields fell and traders upped their bets that the BoE will cut interest rates at least once more this year.

Euro/sterling was up 0.7% at 83.83 pence per euro.

The greenback rose to a one-month peak, as investors scooped up safe-haven assets. Data on Wednesday that showed strength in the U.S. jobs market reinforced bets that the Federal Reserve will not rush to cut interest rates.

(Reporting by Stefano Rebaudo, editing by Amanda Cooper)