Investing.com - The pound pared losses against the U.S. dollar on Thursday, but remained under pressure as strong U.S. employment data boosted demand for the greenback and an earlier report on U.K. service sector activity continued to weigh on sterling.
GBP/USD pulled away from 1.7104, the pair''s lowest since July 1, to hit 1.7152 during U.S. morning trade, still down 0.08%.
Cable was likely to find support at 1.7096, the low of July 1 and resistance at 1.7175, Wednesday’s high and the most since October 2008.
The dollar strengthened broadly after the U.S. Department of Labor said non-farm payrolls rose by 288,000 last month, easily surpassing expectations for an increase of 212,000. The previous month’s figure was revised up to a gain of 224,000 from a previously reported increase of 217,000.
The unemployment rate ticked down to a four-and-a-half year low of 6.1% from 6.3% in May. Analysts had expected the jobless rate to hold steady at 6.3% last month.
Separately, the Institute of Supply Management said its non-manufacturing purchasing manager''s index fell to 56.0 last month from a reading of 56.3 in May. Analysts had expected the index to hold steady at 56.3 in June.
Earlier Thursday, the Markit U.K. services PMI slowed to 57.7 in June from 58.6 in May, and below forecasts of 58.3. It was the lowest reading in three months, but remained well above the 50 level separating growth from contraction.
New business volumes rose at the fastest rate in six months and the sector created jobs at a record pace.
The report added to indications that the economy was continuing to grow strongly in the second quarter after the economy expanded at the fastest annual rate since 2007 in the first three months of 2014.
Sterling has strengthened broadly since the start of this year, gaining more the 13% against the dollar amid expectations that the deepening U.K. recovery will prompt the Bank of England to raise rates before the end of the year.
Sterling was higher against the euro, with EUR/GBP shedding 0.26% to 0.7936.
Also Thursday, the European Central Bank left all rates on hold earlier Thursday, in a widely anticipated decision, after cutting rates to record lows in June.
ECB President Mario Draghi reiterated the bank’s forward guidance that rates will remain on hold at present or lower levels for an extended period.
The ECB president also announced that it will shift to a six-week meeting cycle from January 2015 and that it will start publishing meeting minutes.
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