Investing.com - The pound erased losses against the U.S. dollar on Friday, after the Bank of England left its monetary policy unchanged, while investors turned to the release of a string of U.S. economic reports later in the day.
GBP/USD hit 1.5662 during European afternoon trade, the session high; the pair subsequently consolidated at 1.5644, adding 0.13%.
Cable was likely to find support at 1.5522, the low of September 3 and resistance at 1.5696, the high of August 20 and a two-month high.
In a widely expected move, the BoE held its benchmark interest rate at 0.50% and kept the size of its asset purchase program unchanged at GBP375 billion.
Last month, the BoE had pledged to keep rates on hold at record lows until the U.K. unemployment rate falls below 7%, something the bank sees as unlikely to happen for another three years.
However, upbeat U.K. service sector data on Wednesday bolstered expectations that the BoE may have to raise interest rates sooner than it has indicated.
Markit said U.K. services purchasing managers’ index rose to 60.5 in August, the highest since December 2006, from 60.2 in July. Economists had forecast a decline to 59.0.
The report said new business grew for the eight successive month and the latest increase was the largest seen in more than 16 years.
Meanwhile, expectations that the Federal Reserve could start to phase out stimulus measures as soon as this month persisted after upbeat U.S. manufacturing data on Tuesday.
Investors were especially looking ahead to Friday’s highly-anticipated U.S. nonfarm payrolls report which is seen as key to the Fed’s decision on tapering.
Separately, market participants remained cautious after the U.S. Senate's Foreign Relations Committee approved a resolution on authorizing limited U.S. military intervention in Syria. The full Senate is expected to vote on military action on September 9.
Sterling was higher against the euro with EUR/GBP slipping 0.12%, to hit 0.8441.
In the euro zone, official data showed that German factory orders dropped 2.7% in July, confounding expectations for a 1% decline, following an upwardly revised 5% rise the previous month.
Later in the day, the U.S. was to release the ADP nonfarm payrolls report on private sector job creation, as well as the weekly government report on initial jobless claims.
In addition, the ISM was to release data on non-manufacturing activity in the U.S.
GBP/USD hit 1.5662 during European afternoon trade, the session high; the pair subsequently consolidated at 1.5644, adding 0.13%.
Cable was likely to find support at 1.5522, the low of September 3 and resistance at 1.5696, the high of August 20 and a two-month high.
In a widely expected move, the BoE held its benchmark interest rate at 0.50% and kept the size of its asset purchase program unchanged at GBP375 billion.
Last month, the BoE had pledged to keep rates on hold at record lows until the U.K. unemployment rate falls below 7%, something the bank sees as unlikely to happen for another three years.
However, upbeat U.K. service sector data on Wednesday bolstered expectations that the BoE may have to raise interest rates sooner than it has indicated.
Markit said U.K. services purchasing managers’ index rose to 60.5 in August, the highest since December 2006, from 60.2 in July. Economists had forecast a decline to 59.0.
The report said new business grew for the eight successive month and the latest increase was the largest seen in more than 16 years.
Meanwhile, expectations that the Federal Reserve could start to phase out stimulus measures as soon as this month persisted after upbeat U.S. manufacturing data on Tuesday.
Investors were especially looking ahead to Friday’s highly-anticipated U.S. nonfarm payrolls report which is seen as key to the Fed’s decision on tapering.
Separately, market participants remained cautious after the U.S. Senate's Foreign Relations Committee approved a resolution on authorizing limited U.S. military intervention in Syria. The full Senate is expected to vote on military action on September 9.
Sterling was higher against the euro with EUR/GBP slipping 0.12%, to hit 0.8441.
In the euro zone, official data showed that German factory orders dropped 2.7% in July, confounding expectations for a 1% decline, following an upwardly revised 5% rise the previous month.
Later in the day, the U.S. was to release the ADP nonfarm payrolls report on private sector job creation, as well as the weekly government report on initial jobless claims.
In addition, the ISM was to release data on non-manufacturing activity in the U.S.