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Forex - GBP/USD falls as lackluster reports prompt profit taking

Published 10/03/2013, 03:17 PM
Updated 10/03/2013, 03:19 PM
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Investing.com - The pound weakened against the dollar on Thursday after lackluster service-sector and housing data out of the U.K. sent investors selling sterling for profits.

In U.S. trading on Thursday, GBP/USD was trading at 1.6160, down 0.39%, up from a session low of 1.6156 and off from a high of 1.6241.
 
Cable was likely to find support at 1.6128, Monday's low, and resistance at 1.6260, Tuesday's high.

In the U.K. earlier, the Markit research firm said its services purchasing manager's index ticked down to 60.3 in September from 60.5 in August, albeit better than expectations for a decline to 60.0.

A separate report showed that house price inflation in the U.K. rose 0.3% last month, confounding expectations for a 0.5% increase after a downwardly revised 0.3% uptick in August.

The tame data sparked a round of profit-taking, as investors viewed the pound as due for a breather, especially after hitting nine-month highs against the greenback in recent sessions.

Meanwhile in the U.S., soft data dampened the dollar's advance.

The Institute of Supply Management reported earlier that its non-manufacturing purchasing manager's index fell to a three-month low of 54.4 in September from 58.6 in August.
Analysts were expecting the index to decline to 57.4 last month.

Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending Sept. 28 rose by 1,000 to a seasonally adjusted 308,000, better than analysts' calls for jobless claims to rise by 6,000 to 313,000 last week.

Jobless claims for the preceding week were revised up to a gain of 307,000 from a previously reported increase of 305,000.

An ongoing U.S. government shutdown continued to dampen demand for the greenback.

President Barack Obama met with Republican and Democratic leaders in Congress on Wednesday, although a solution still seemed unlikely.

Markets were also considering how the political deadlock will affect negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by Oct. 17.

The pound, meanwhile, was down against the euro and down against the yen, with EUR/GBP up 0.71% at 0.8430 and GBP/JPY down 0.49% at 157.17.










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