Investing.com - The pound fell against the broadly stronger dollar on Friday after data showed that the U.S. economy added jobs at a solid rate last month, reinforcing expectations that the Federal Reserve will hike interest rates by mid-year.
The Labor Department reported that the U.S. economy added 257,000 jobs in January, far more than the 234,000 forecast by economists. December’s figure was revised to 329,000 from a previously reported 252,000.
While the unemployment rate ticked up to 5.7% last month from December’s 5.6% hourly earnings and the participation rate both saw increases in January.
The upbeat jobs was seen as strong enough to indicated that the Fed will remain on track to start raising rates from near zero levels as early as June.
GBP/USD fell to lows of 1.5212 following the release of the data, and was last at 1.5242, down 0.55% for the day.
Sterling had risen to one month highs against the dollar in the previous session after survey data on the services and manufacturing sectors earlier in the week indicated that output growth rebounded last month after slowing at the end of 2014.
However, the reports also indicated that inflation pressures remain subdued, reinforcing expectations that rates will remain on hold at record lows for longer.
The Bank of England made no changes to monetary policy after its meeting on Thursday, as widely anticipated.
In the week ahead, investors will be looking to the bank’s quarterly inflation report, due to be published on Thursday for further indications on when interest rates could start to rise. Currently markets are expecting the first rate hike in early 2016.
Market watchers will also be focusing on Friday’s U.S. consumer sentiment data.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday and Wednesday as there are no relevant events on these days.
Tuesday, February 10
The U.K. is to release data on industrial and manufacturing production.
Thursday, February 12
The BoE is to publish its quarterly inflation report. BoE Governor Mark Carney is to hold a press conference to discuss the report.
The U.S. is to release reports on retail sales and initial jobless claims.
Friday, February 13
The U.S. is to round up the week with preliminary data on consumer sentiment.