Investing.com - The dollar fell against the pound on Friday after an unexpectedly weak U.S. nonfarm payrolls report reduced market expectations for a midyear rate hike by the Federal Reserve.
GBP/USD hit highs of 1.4945 immediately following the release of the data and was last up 0.62% at 1.4919.
The Labor Department reported that the U.S. economy added 126,000 new jobs in March, less than half of February’s gain and the smallest increase since December 2013. Economists had forecast jobs growth of 245,000 last month.
February’s figure was revised down to 264,000 from 295,000. The unemployment rate remained unchanged at a six-and-a-half year lows of 5.5%, in line with forecasts.
The surprisingly weak report added to concerns over the outlook for economic growth after other recent economic data pointed to a slowdown at the start of the year.
A slowing labor market could prompt the Fed to delay a planned increase in interest rates. Last month the Fed indicated that the first rate increase could come as soon as June, but added that continued improvement in labor markets would be a key factor it would consider.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies fell 0.95% to 96.84. The index ended the week down 0.74%, its third straight weekly decline.
The drop in the dollar was exacerbated by thin trading conditions due to the Easter holiday weekend. Most markets in Europe were closed and U.S markets traded for shortened hours.
In the week ahead, markets outside the U.S. will remain closed on Monday. The U.S. is to release what will be closely watched data on service sector activity on Monday and the Federal Reserve is to publish the minutes of its March meeting on Wednesday.
Tuesday’s report on U.K. services sector growth and Thursday’s rate announcement by the Bank of England will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, April 6
Markets in the U.K. will remain closed for a holiday.
In the U.S., the Institute of Supply Management is to release data on service sector activity.
Tuesday, April 7
The U.K. is to release its services PMI.
Wednesday, April 8
The Federal Reserve is to publish the minutes of its March meeting.
Thursday, April 9
The U.K. is to release data on the trade balance.
Later in the day, the BoE is to announce its benchmark interest rate.
The U.S. is to release the weekly report on initial jobless claims.
Friday, April 10
The U.K. is to release data on industrial and manufacturing production.
The U.S. is to round up the week with a report on import prices.