Shutterstock photo
Markets

Forex - Pound steady after U.K. data, ECB, BoE ahead

Shutterstock photo

Shutterstock photo

Investing.com -

Investing.com - The pound was steady against the dollar on Thursday after data showed that U.K. industrial output topped forecasts in September, as investors remained on the sidelines ahead of U.K. and European central bank decisions later in the day and Friday's U.S. nonfarm payrolls report.

GBP/USD was trading at 1.5978, almost unchanged for the day, off Wednesday's one-year lows of 1.5867.

Sterling had a subdued reaction after the Office of National Statistics said industrial production rose 0.6% in September, beating expectations for a 0.4% gain.

On a year-over-year basis, industrial output rose 1.5%, in line with forecasts.

Manufacturing production increased by 0.4% from a month earlier, slightly better than forecasts of 0.3% and rose by an annualized 2.9%.

The pound fell to a one year low against the dollar on Wednesday after data showed that the U.K. service sector expanded at the slowest rate in 17 months in October, adding to signs that the pace of the economic recovery is cooling.

The soft data indicated that the Bank of England would keep interest rates on hold for longer in order to gauge the full extent of the slowdown in the recovery.

The BoE was expected to keep monetary policy unchanged at its meeting later Thursday.

Investors were also awaiting the outcome of the European Central Bank meeting later in the day, after the Bank of Japan's surprise stimulus move on Friday fuelled expectations that it will soon follow suit in order to spur growth and inflation in the euro area.

The bank's latest policy announcement was given extra significance following recent reports of tensions within the ECB over President Mario Draghi's leadership style.

Demand for the dollar continued to be underpinned after the greenback rose to four-and-a-half-year highs against a currency basket on Wednesday, boosted by Republican gains in the U.S. mid-term elections and a strong private sector jobs report.

The ADP nonfarm payrolls report showed that the U.S. private sector added 230,000 jobs in October, ahead of expectations for jobs growth of 220,000.

Separately, the Institute of Supply Management said that its non-manufacturing index slowed to 57.1 last month from 58.6 in September.

However, the employment component of the index rose, boosting the outlook for the labor market ahead of Friday's U.S. nonfarm payrolls report.

Elsewhere, sterling was lower against the euro, with EUR/GBP rising 0.24% to 0.7832.

Earlier Thursday, data showed that German factory orders rose just 0.8% in September, well below forecasts of a 2.3% increase.

The weak data added to concerns over the outlook for the euro area's largest economy.

Investing.com offers an extensive set of professional tools for the financial markets.

Read more News on Investing.com and download the new Investing.com apps for Android and iOS!

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.

Other Topics

ForEx