Investing.com - The pound firmed against the dollar on Tuesday after U.S. data revealed the world's largest economy added far few jobs than expected in September.
In U.S. trading on Tuesday, GBP/USD was trading at 1.6238, up 0.56%, up from a session low of 1.6116 and off from a high of 1.6247.
Cable was likely to find support at 1.5894, Wednesday's low, and resistance at 1.6260, the high from Oct. 1.
The dollar sank after the Department of Labor said the U.S. economy added 148,000 jobs in September, well below expectations for an increase of 180,000. The previous month’s figure was revised up to a gain of 193,000 from a previously reported increase of 169,000.
July's figure was revised down to 89,000 from 104,000.
The unemployment rate ticked down to a four-and-a-half year low of 7.2% from 7.3% in August due in part to more people dropping out of the labor force, which also weighed on the greenback.
The jobs report published 18 days behind schedule due to disruptions caused by the recent U.S. government shutdown.
The report kept expectations going strong that the Federal Reserve will continue stimulating the economy to boost job creation by buying assets each month.
The Fed is currently purchasing USD85 billion in Treasury holdings and mortgage debt a month to boost the economy, a monetary policy tool known as quantitative easing that drives down interest rates to spur recovery and job creation, weakening the dollar in the process.
Prior to the release of the September jobs report, concerns that the government shutdown and accompanying default fears had may investors betting that any decision to taper asset purchases would come later rather than sooner, and the weak data supported those sentiments on Tuesday.
The pound, meanwhile, was down against the euro and up against the yen, with EUR/GBP up 0.20% at 0.8489 and GBP/JPY up 0.51% at 159.32.
On Wednesday, the BoE is to release the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.
In U.S. trading on Tuesday, GBP/USD was trading at 1.6238, up 0.56%, up from a session low of 1.6116 and off from a high of 1.6247.
Cable was likely to find support at 1.5894, Wednesday's low, and resistance at 1.6260, the high from Oct. 1.
The dollar sank after the Department of Labor said the U.S. economy added 148,000 jobs in September, well below expectations for an increase of 180,000. The previous month’s figure was revised up to a gain of 193,000 from a previously reported increase of 169,000.
July's figure was revised down to 89,000 from 104,000.
The unemployment rate ticked down to a four-and-a-half year low of 7.2% from 7.3% in August due in part to more people dropping out of the labor force, which also weighed on the greenback.
The jobs report published 18 days behind schedule due to disruptions caused by the recent U.S. government shutdown.
The report kept expectations going strong that the Federal Reserve will continue stimulating the economy to boost job creation by buying assets each month.
The Fed is currently purchasing USD85 billion in Treasury holdings and mortgage debt a month to boost the economy, a monetary policy tool known as quantitative easing that drives down interest rates to spur recovery and job creation, weakening the dollar in the process.
Prior to the release of the September jobs report, concerns that the government shutdown and accompanying default fears had may investors betting that any decision to taper asset purchases would come later rather than sooner, and the weak data supported those sentiments on Tuesday.
The pound, meanwhile, was down against the euro and up against the yen, with EUR/GBP up 0.20% at 0.8489 and GBP/JPY up 0.51% at 159.32.
On Wednesday, the BoE is to release the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.