Forex Pros – The pound extended modest losses against the U.S. dollar on Monday, slipping to a fresh daily low as the pound firmed up following Friday’s losses on the back of weaker-than-expected U.S. employment data.
GBP/USD hit 1.6396 during European early afternoon trade, the daily low; the pair subsequently consolidated at 1.6402, slipping 0.13%.
Cable was likely to find support at 1.6304, last Thursday’s low and resistance at 1.6511, the high of May 30.
On Friday, the U.S. Department of Labor said nonfarm payrolls rose much less-than-expected in May, increasing by just 54K as the private sector posted the smallest jobs gain in nearly a year.
Analysts had expected nonfarm payrolls to rise by 169K last month. The slowdown in job creation pushed the unemployment rate up to a five-month high of 9.1% from 9.0% in April.
The weaker-than-expected data reinforced expectations that the Federal Reserve is likely to keep rates on hold for the rest of the year.
The Bank of England was to hold a policy setting meeting later in the week and a slew of weaker-than-expected data last week reinforced the view that the sluggish recovery will prompt policymakers to keep U.K. interest rates low for some months to come.
Meanwhile, the pound was slightly higher against the euro, with EUR/GBP dipping 0.05% to hit 0.8905.
Earlier Monday, U.K. Chancellor George Osborne was forced to defend his deficit-cutting plan after a group of economists said the pace of cutbacks was putting the country’s economic recovery at risk.
ForexPros.com
