Forex - GBP/USD dips on solid U.S. May unemployment report

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Investing.com - The pound moved lower against the greenback on Friday after the U.S. May jobs report came in close enough to market expectations to draw applause from investors, who bet the economy is in less need of dollar-weakening stimulus measures from the Federal Reserve.

In U.S. trading on Friday, GBP/USD was down 0.14% at 1.6796, up from a session low of 1.6782 and off a high of 1.6845.

Cable was likely to find support at 1.6699, Wednesday's low, and resistance at 1.6.458, the earlier high.

The U.S. Labor Department reported earlier that the economy added 217,000 in May, more or less in with expectations for a 218,000 increase, after a 282,000 rise in April, whose figure was revised down from a previously estimated 288,000 gain.

The private sector added 216,000 jobs last month, exceeding expectations for a 210,000 gain, which drew market applause and firmed the dollar.

The report also showed that the U.S. unemployment rate remained unchanged at 6.3% last month compared to expectations for a rise to 6.4%.

The data, viewed by markets as not exceptionally robust, was still strong enough to keep expectations firm for the Federal Reserve to continue winding down its monthly bond-buying program, which weakens the dollar by suppressing long-term interest rates.

Meanwhile across the Atlantic, official data showed that the U.K. trade deficit widened to £8.92 billion in April, from £8.29 billion in March, whose figure was revised from a previously estimated deficit of £8.48 billion. Analysts had expected the trade deficit to widen to £8.65 billion in April.

Separately, the Bank of England said consumer inflation expectations for the next year fell to 2.6% in the first quarter, from 2.8% in the three months to December.

Elsewhere, sterling was flat against the euro, with EUR/GBP down 0.01% at 0.8121, and down against the yen, with GBP/JPY down 0.03% at 172.19.

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