Investing.com - The pound slumped to 11-month lows against the dollar on Friday after data showed that the U.S. economy added more jobs than expected last month, while dovish remarks by a Bank of England official also weighed.
GBP/USD was down 1.08% to 1.5970 in late trade. For the week, the pair lost 1.66%.
The Labor Department reported Friday that the U.S. economy added 248,000 jobs in September, well ahead of forecasts for jobs growth of 215,000. The unemployment rate ticked down to 5.9%, the lowest level since July 2008.
The upbeat jobs report was tempered by slow growth in wages. Average hourly earnings rose by 2.0% year-over-year, slowing slightly from August.
Despite this, the employment data added to the view that the strengthening economic recovery may prompt the Federal Reserve to raise interest rates sooner. The central bank is on track to end its asset purchase program later this month.
The US Dollar Index, which tracks the performance of the greenback against a basket of six major currencies, was up 1.23% to 86.79 in late trade, a high last seen in June 2010, capping its twelfth consecutive weekly gain. The twelve-week rally is the longest since the index was created in 1971.
Sterling came under pressure after Kristin Forbes, an external member of the BoE’s monetary policy committee, warned in a speech on Friday that the appreciation of the pound at the start of this year has acted as a drag on economic growth.
Also Friday, data showed that U.K. services sector growth eased slightly in September, indicating that the economic recovery may be moderating.
The U.K. services purchasing managers index ticked down to a three month low of 58.7 from 60.5 in August.
The report came after data on Wednesday showed that output in the U.K. manufacturing sector slowed to a 17 month low in September.
The data was seen as increasing the likelihood that the BoE will leave rates on hold until next year.
In the coming week, investors will be looking ahead to Wednesday’s Federal Reserve meeting minutes for further indications on the future possible direction of U.S. monetary policy.
The BoE is to hold its monthly monetary policy meeting on Thursday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday as there are no relevant events on this day.
Tuesday, October 7
The U.K. is to produce data on industrial and manufacturing production.
Wednesday, October 8
In the U.S., the Federal Reserve is to publish the minutes of its latest policy setting meeting.
Thursday, October 9
The BoE is to announce its benchmark interest rate.
The U.S. is to publish its weekly government report on initial jobless claims.
Friday, October 10
The U.K. is to release a report on the trade balance.
The U.S. is to round up the week with data on import prices.