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Forex - GBP/USD shoots up on disappointing U.S. jobs report

Published 08/02/2013, 01:28 PM
Updated 08/02/2013, 01:29 PM
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Investing.com - The pound shot up against the dollar on Friday after U.S. jobs numbers disappointed, while U.K. construction figures surprised on the upside.

In U.S. trading on Friday, GBP/USD was trading at 1.5288, up 1.12%, up from a session low of 1.5103 and off from a high of 1.5308.

Cable was likely to find support at 1.5103, the earlier low, and resistance at 1.5413, Monday's high.

The Bureau of Labor Statistics said the U.S. economy added 162,000 jobs in July, missing expectations for an increase of around 189,000.

The report also revealed that the U.S. unemployment rate ticked down to 7.4% in July from 7.6% the previous month. Analysts had expected the unemployment rate to slip to 7.5% last month.

The overall jobs report dampened expectations for the Federal Reserve to begin tapering its USD85 billion monthly bond-buying program, which seeks to spur recovery by keeping long-term interest rates low, weakening the greenback in the process.

The Fed is due to meet in September to discuss policy, though concerns began to build that monetary authorities may wait until December to begin tapering the stimulus program and let the economy stand on its own, and such a delay could keep the greenback weaker for longer than expected.

Meanwhile across the Atlantic, London-based Markit research group reported earlier that its U.K. construction purchasing managers' index rose to 57.0 in July from 51.0 in June, blowing past expectations for a rise to 51.5 and expanding at the fastest pace since July 2010.

A separate report showed that house price inflation in the U.K. rose 0.8% last month, more than the expected 0.4% gain after an increase of 0.3% in June.

The pound, meanwhile, was up against the euro and up against the yen, with EUR/GBP down 0.54% at 0.8690 and GBP/JPY up 0.49% at 151.23.
   







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