Forexpros – The pound edged higher against the U.S. dollar on Monday, but gains were limited as concerns over the outlook for global economic growth continued to weigh on market sentiment following the release of disappointing economic reports.
GBP/USD hit 1.5510 during European morning trade, the daily high; the pair subsequently consolidated at 1.5505, adding 0.11%.
Cable was likely to find support at 1.5428, the low of June 7 and resistance at 1.5581, the high of June 11.
Market sentiment remained fragile after official data on Friday showed that the U.S. economy added just 80,000 jobs in June, below market expectations for a gain of around 90,000. It was the third consecutive month where hiring failed to top the 100,000-level.
The report also showed that the U.S. unemployment rate held steady at 8.2% in June, in line with expectations.
Meanwhile, in China, government data released earlier showed that consumer price inflation accelerated at the slowest rate since January 2010 in June, potentially giving Beijing room to further ease monetary policy.
An unexpected rate cut from China last week stocked fears of a deeper-than-expected slowdown in the world’s second largest economy.
Demand for sterling also remained under pressure after the Bank of England said on Thursday that “the weaker outlook for U.K. output growth means that the margin of economic slack is likely to be greater and more persistent.”
The comments came after BoE policymakers voted to increase the stock of asset purchases financed by the issuance of central bank reserves by GBP50 billion to GBP375 billion, in order to shield the recession hit U.K. economy from the ongoing debt crisis in the euro zone.
The bank also left the benchmark interest rate unchanged at 0.5%, where it’s stood since March 2009, in a widely expected move.
Elsewhere, sterling was almost unchanged against the euro with EUR/GBP inching 0.04% lower, to hit 0.7936.
Later in the day, a report was to be produced on investor confidence in the euro zone, while European Central Bank President Mario Draghi was to testify before the European Parliament.
Investors were also eyeing a meeting of euro zone finance ministers in Brussels, to discuss a plan announced last month to help the region’s indebted nations and banking systems.
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