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Forex - GBP/USD falls as U.S. fiscal and monetary uncertainties build
Published Jan 04, 2013 03:01PM ET
Investing.com - The pound fell against the dollar on Friday despite solid U.S. jobs data, as investors opted to remain camped out in the greenback amid growing fears political brinkmanship may arise during upcoming U.S. debt-ceiling debates.
Fiscal debates will return to the U.S. Congress when the government hits its USD16.4 trillion debt ceiling likely in February.
In U.S. trading on Friday, GBP/USD was trading at 1.6067, down 0.25%, up from a session low of 1.6010 and off from a high of 1.6110.
The pair was likely to find support at 1.6067, the low from Dec. 27, and resistance at 1.6110, the earlier high.
Investors shrugged off positive data earlier.
In the U.S. earlier, the Bureau of Labor Statistics reported the U.S. economy added 155,000 nonfarm payrolls in December, beating market calls for the economy to create 150,000 new jobs.
In addition, the U.S. employment rate remained unchanged at 7.8% last month, though markets had hoped for a decline to 7.7%.
Meanwhile, the Bureau of Labor Statistics revised October's figures to 137,000 from 138,000 new jobs and hiked November's figure to 161,000 from 146,000.
Elsewhere, the U.S. Institute of Supply Management reported earlier that its non-manufacturing index improved to 56.1 in December from 54.7 in November, beating expectations for a rise to 54.2.
Still, fears lawmakers may stage a repeat performance of 2011's debt-ceiling debates, which nearly threw the country into default thanks to brinkmanship, kept investors firmly entrenched in the dollar, especially on sentiment the jobs market is not improving fast enough to suggest the economy may be returning to its pre-recession health.
Uncertainty as to when the Federal Reserve may wind down its monetary stimulus programs also pushed down the pair.
Meanwhile in the U.K., service-sector activity fell unexpectedly last month.
In a report, The Chartered Institute of Purchasing & Supply and the NTC Economics said that U.K. Services PMI fell to a seasonally adjusted annual rate of 48.9 in December from 50.2 in the preceding month.
Analysts had expected U.K. Services PMI to rise to 50.4 last month.
The pound, meanwhile, was down against the euro and up against the yen, with EUR/GBP trading up 0.41% at 0.8135 and GBP/JPY up 0.75% at 141.57.
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