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Forex - GBP/USD extends losses on U.S. jobs report, U.K. trade data

Published 11/11/2013, 02:50 PM
Updated 11/11/2013, 02:51 PM
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Investing.com - The pound carried Friday's losses against the dollar into Monday, as investors applauded the U.S. October jobs report, though profit taking capped the dollar's advance and cushioned the pound's losses.

In U.S. trading on Monday, GBP/USD was trading at 1.5987, down 0.17%, up from a session low of 1.5966 and off from a high of 1.6022.
 
Cable was likely to find support at 1.5903, the low from Nov. 4, and resistance at 1.6118, Wednesday's high.

On Friday, the Bureau of Labor Statistics reported that the U.S. economy added 204,000 jobs in October, far surpassing expectations for a 125,000 increase.

A day earlier, official data showed that the U.S. economy grew 2.8% on year in the third quarter, well beyond expectations for 2.0% growth.

The figures fueled market sentiments that the Federal Reserve could soon announce plans to scale back its USD85 billion in monthly asset purchases, which drive down borrowing costs to spur recovery, weakening the greenback as a side effect.

Profit taking kicked in on Monday, especially after investors concluded that the Fed may likely leave its stimulus policies unchanged until Janet Yellen takes the helm of the U.S. central bank and holds her first policy meeting in March.

Further fueling profit taking were concerns that fewer high-quality jobs are being created when compared to retail, leisure and hospitality jobs, which could further encourage the Fed to hold off on scaling backs stimulus until early 2014.
 
The session saw little in the way of economic indicators on both sides of the Atlantic on Monday.

The pound, meanwhile, was down against the euro and down against the yen, with EUR/GBP up 0.50% at 0.8388 and GBP/JPY down 0.03% at 158.62.

On Tuesday, the U.K. is to release data on consumer price inflation, which accounts for the majority of overall inflation.









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