Forex - GBP/USD off 1-month low but remains under pressure

Shutterstock photo - The pound eased off a one-month low against the U.S. dollar on Friday, supported by positive U.S. economic reports, but sterling remained under pressure after dowmneat U.K. data and amid U.S. debt worries.

GBP/USD hit 1.6010 during U.S. morning trade, the pair's lowest since December 7; the pair subsequently consolidated at 1.6042, dropping 0.41%.

Cable was likely to find support at 1.5962, the low of December 7 and resistance at 1.6110, the session high.

Market sentiment slightly improved after the Institute of Supply Management said its non manufacturing index improved to 56.1 in December from a reading of 54.7 the previous month, beating expectations for a rise to 54.2.

The data came after the Bureau of Labor Statistics said the U.S. economy added 155,000 jobs in December, more than the expected 150,000 increase, after an upwardly revised 161,000 rise the previous month.

In addition, the U.S. employment rate remained unchanged at 7.8% last month, compared with expectations for a decline to 7.7%.

But markets were jittery after the minutes of the Fed's December policy meeting showed that officials began debating an end to bond-buying as early as this year even while preparing to boost stimulus to a new record.

Investors also remained cautious over the longer term outlook in the U.S., with negotiations on raising the debt ceiling still to come in February.

Sterling came under pressure earlier, after Markit research group said that the U.K. service sector purchasing managers' index deteriorated to 48.9 in December from a reading of 50.2 the previous month, falling back into contraction territory for the first time since January 2011.

Analysts had expected the index to tick up to 50.4 last month.

The pound was also lower against the euro with EUR/GBP rising 0.39%, to hit 0.8133.

Also Friday, preliminary data showed that consumer price inflation in the euro zone remained unchanged at an annualized rated of 2.2% last month. Analysts had expected consumer price inflation to tick down to 2.1% in December. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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