Forexpros – The pound held steady against U.S. dollar on Friday, after disappointing U.K. service sector data, as investors awaited the release of a highly anticipated U.S. employment report later in the day.
GBP/USD hit 1.5527 during European morning trade, the daily high; the pair subsequently consolidated at 1.5523, inching up 0.06%.
Cable was likely to find support at 1.5471, the low of July 25 and resistance at 1.5626, the high of July 22.
The pound came under pressure after data showed that service sector activity in the U.K. fell unexpectedly in July, hitting its lowest level since December 2010.
The Markit CIPS U.K. services purchasing managers’ index declined to 51.0 in July from a reading of 51.3 the previous month, disappointing expectations for a rise to 51.6.
The data came a day after after the Bank of England left the benchmark interest rate unchanged at 0.5% and kept the size of its quantitative easing program at GBP375 billion.
Meanwhile, markets remained jittery after European Central Bank President Mario Draghi said the bank may undertake bond purchases in order to bring down the “exceptionally high” borrowing costs of stressed euro zone members, but provided no explicit details on how and when these activities may be carried out.
The statement disappointed market expectations for bold steps to counter the debt crisis, which have been building since Draghi pledged last week to do whatever is necessary to preserve the euro.
Investors were also eyeing the release of U.S. jobs data, as the results were to give more hints on whether or not the Federal Reserve will need to add stimulus measures to shore up growth, after the central bank refrained from implementing fresh easing measures on Wednesday.
Elsewhere, the pound was fractionally lower against the euro with EUR/GBP easing up 0.07%, to hit 0.7856.
Later in the day, the U.S. was to release government data on non-farm employment change and the unemployment rate. The Institute of Supply Management was also to publish a report on non-manufacturing activity.
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