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Forex - GBP/USD slides on soft U.K. wage report

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Shutterstock photo - - The pound weakened against the dollar on Wednesday after U.K. wage data missed expectations, offsetting disappointing retail sales figures in the U.S.

In U.S. trading on Wednesday, GBP/USD was trading down 0.69% at 1.6696 up from a session low of 1.6686 and off a high of 1.6842.

Cable was likely to find support at 1.6662, the low from April 15, and resistance at 1.6888, the high from Aug. 5.

The pound came under broad pressure after the Bank of England cut its forecast for wage growth to 1.25% from 2.5% in 2014, before picking up to 3.25% in 2015.

The bank reiterated that when rates do start to rise they will do so a "small, slow" manner.

Separately, the Office of National Statistics reported that average earnings, excluding bonuses, rose by just 0.6% in the three months to June, missing market calls for a 0.07% ratings.

Including bonuses, pay packets contracted by 0.2% during the quarter, the first decrease since 2009 and more than consensus forecasts for a 0.1% contraction.

Elsewhere, the U.K. unemployment rate fell to 6.4% in the quarter, in line with expectations and down from 6.5% in May.

The number of people claiming unemployment benefits fell by 33,600 last month, beating expectations for a decline of 30,000. June's figure was revised to a drop of 39,500 from 36,300 previously.

Meanwhile in the U.S., the Commerce Department reported that U.S. retail sales came in flat last month, disappointing market expectations for a 0.2% increase.

Core retail sales, which exclude auto sales, rose just 0.1% in July, below expectations for a 0.4% gain.

Still, investors viewed the figure as a pothole on the road to recovery in the U.S., especially in wake of disappointing European output data.

Eurostat, the European Union's statistical office, reported earlier that industrial output in the euro area contracted 0.3% in June. It was the second consecutive monthly decline and confounded expectations for a 0.3% expansion.

The report came one day after data showed that German economic sentiment deteriorated sharply this month, falling to a 20 month low, largely due to geopolitical tensions.

Elsewhere, sterling was down against the euro, with EUR/GBP up 0.69% at 0.8007, and down against the yen, with GBP/JPY down 0.49% at 171.09.

On Thursday, the U.S. is to release the weekly report on initial jobless claims. offers an extensive set of professional tools for the financial markets.

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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.

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