Investing.com - The pound traded lower against the dollar on Thursday after investors went long on dollar positions in wake of better-than-expected U.S. labor and service-sector reports that cemented expectations for the Federal Reserve to announce plans to taper stimulus tools later this month.
Stimulus programs such as the Fed's USD85 million in monthly asset purchases weaken the dollar to spur recovery, and talk of their dismantling — often the product of improving U.S. data — can strengthen the greenback.
In U.S. trading on Thursday, GBP/USD was trading at 1.5588, down 0.23%, up from a session low of 1.5574 and off from a high of 1.5667.
Cable was likely to find support at 1.5506, Monday's low, and resistance at 1.5718, the high from Aug. 21.
The Institute of Supply Management reported earlier that its U.S. non-manufacturing purchasing managers' index hit a 29-month high of 58.6 in August from 56.0 in July.
Analysts were expecting the index to fall to 55.0 last month.
The numbers sparked demand for the dollar by fueling sentiments that the Federal Reserve may announce at its Sept. 17-18 policy meeting a decision to begin winding down its USD85 billion in monthly bond purchases, which weaken the greenback to spur recovery.
Better-than-expected economic indicators out of the manufacturing and labor market bolstered dollar demand as well.
Official data showed that U.S. factory orders fell 2.4% in July, less than an expected 3.3% decline, following an upwardly revised 1.6% rise the previous month.
The Department of Labor, meanwhile, reported that the number of individuals filing for initial jobless benefits in the week ending Aug. 30 fell by 9,000 to 323,000, outpacing forecasts for a decline of 2,000.
Investors took in stride an ADP report showing that 176,000 jobs were created in the U.S. private sector in August, less than an expected 180,000 increase after a downwardly revised 198,000 rise the previous month.
Meanwhile across the Atlantic, the Bank of England held its benchmark interest rate at 0.50% and kept the size of its asset-purchasing program unchanged at GBP375 billion, in line with expectations.
The pound, meanwhile, was up against the euro and up against the yen, with EUR/GBP down 0.43% at 0.8416 and GBP/JPY up 0.22% at 156.17.
The European Central Bank earlier left benchmark interest rates unchanged at 0.50%, in line with expectations.
The euro came under pressure after European Central Bank President Mario Draghi told a press conference that monetary policy will remain loose for as long as necessary, adding that interest rates should remain at present or possibly lower levels for an extended period of time.
Also in Europe, Germany reported that the country's factory orders dropped 2.7% in July compared to expectations for a 1% decline, following an upwardly revised 0.5% rise in June.
On Friday, the U.S. is to round up the week with closely watched government data on nonfarm payrolls and the unemployment rate, as well as data on average hourly earnings.
The U.K. is to publish data on manufacturing production, consumer inflation expectations and the trade balance.
Stimulus programs such as the Fed's USD85 million in monthly asset purchases weaken the dollar to spur recovery, and talk of their dismantling — often the product of improving U.S. data — can strengthen the greenback.
In U.S. trading on Thursday, GBP/USD was trading at 1.5588, down 0.23%, up from a session low of 1.5574 and off from a high of 1.5667.
Cable was likely to find support at 1.5506, Monday's low, and resistance at 1.5718, the high from Aug. 21.
The Institute of Supply Management reported earlier that its U.S. non-manufacturing purchasing managers' index hit a 29-month high of 58.6 in August from 56.0 in July.
Analysts were expecting the index to fall to 55.0 last month.
The numbers sparked demand for the dollar by fueling sentiments that the Federal Reserve may announce at its Sept. 17-18 policy meeting a decision to begin winding down its USD85 billion in monthly bond purchases, which weaken the greenback to spur recovery.
Better-than-expected economic indicators out of the manufacturing and labor market bolstered dollar demand as well.
Official data showed that U.S. factory orders fell 2.4% in July, less than an expected 3.3% decline, following an upwardly revised 1.6% rise the previous month.
The Department of Labor, meanwhile, reported that the number of individuals filing for initial jobless benefits in the week ending Aug. 30 fell by 9,000 to 323,000, outpacing forecasts for a decline of 2,000.
Investors took in stride an ADP report showing that 176,000 jobs were created in the U.S. private sector in August, less than an expected 180,000 increase after a downwardly revised 198,000 rise the previous month.
Meanwhile across the Atlantic, the Bank of England held its benchmark interest rate at 0.50% and kept the size of its asset-purchasing program unchanged at GBP375 billion, in line with expectations.
The pound, meanwhile, was up against the euro and up against the yen, with EUR/GBP down 0.43% at 0.8416 and GBP/JPY up 0.22% at 156.17.
The European Central Bank earlier left benchmark interest rates unchanged at 0.50%, in line with expectations.
The euro came under pressure after European Central Bank President Mario Draghi told a press conference that monetary policy will remain loose for as long as necessary, adding that interest rates should remain at present or possibly lower levels for an extended period of time.
Also in Europe, Germany reported that the country's factory orders dropped 2.7% in July compared to expectations for a 1% decline, following an upwardly revised 0.5% rise in June.
On Friday, the U.S. is to round up the week with closely watched government data on nonfarm payrolls and the unemployment rate, as well as data on average hourly earnings.
The U.K. is to publish data on manufacturing production, consumer inflation expectations and the trade balance.