Investing.com - The pound edged lower against the dollar on Thursday, ahead of the Bank of England’s rate review later in the session, while Friday’s U.S. jobs report for January was also in focus.
GBP/USD dipped 0.08% to 1.6295, from 1.6307 on Wednesday.
Cable was likely to find support at 1.6180 and resistance at 1.6400.
The BoE is widely expected to leave rates on hold at 0.5%, but the decision will be closely watched in case it updates its forward guidance on rates.
Data released on Wednesday showed that activity in the U.K.’s dominant service sector eased in January, but growth remained solid, indicating that the economic recovery is on track.
The report showed that price pressures for service firms picked up only slightly last month, giving the central bank leeway to keep policy loose for longer while the economic recovery continues.
Investors also remained cautious ahead of Friday’s nonfarm payrolls report, amid concerns over a possible slowdown in the U.S. recovery, following the release of poor manufacturing data earlier in the week.
Data released on Wednesday showed that the U.S. service sector expanded at the fastest rate in four months in January, while another report showed that the U.S. private sector added 175,000 jobs in January, below expectations for jobs growth of 180,000.
Elsewhere, sterling was fractionally lower against the euro, with EUR/GBP inching up 0.04% to 0.8300.
Sentiment on the euro remained fragile ahead of the European Central Bank’s rate announcement later Thursday, amid speculation that the bank may tighten monetary policy in order to stave off deflation and shore up the fragile recovery in the region.
Data last week showed that the annual rate of inflation in the euro zone slowed to 0.7% in January. It was the fourth consecutive month the inflation rate came in at less than 1% and was well below the ECB’s target of 2%.
The ECB unexpectedly cut rates to a record low 0.25% when inflation fell to a four-year low of 0.7% in October.