The pound softened against the dollar on Wednesday after an industry report on U.S. private-sector hiring beat expectations and kept hopes going for Federal Reserve to begin tapering its dollar-weakening monetary stimulus programs in the coming months.
Stimulus tools such as the Fed''s USD85 billion in monthly bond purchases aim to drive recovery by pushing down long-term interest rates, weakening the dollar as long as they remain in effect.
In U.S. trading on Wednesday, GBP/USD was trading at 1.6382, down 0.06%, up from a session low of 1.6327 and off from a high of 1.6404.
Cable was likely to find support at 1.6134, the low from Nov. 25, and resistance at 1.6442, Monday''s high.
Payroll processing firm ADP reported earlier that non-farm private employment rose by a seasonally adjusted 215,000 in November, blowing past expectations for an increase of 173,000.
November''s figure was revised up to a gain of 184,000 from a previously reported increase of 130,000.
The news bolstered the dollar by keeping expectations strong for the Federal Reserve to announce plans to taper its USD85 billion in monthly bond purchases in early 2014.
The Bureau of Labor Statistics will release the official November jobs report on Friday.
Hit-or-miss economic indicators elsewhere in the U.S. failed to seriously dampen the dollar''s advance in U.S. trading though they did chop up trading somewhat.
The Institute of Supply Management said its non-manufacturing purchasing managers'' index declined to 53.9 in November from a 55.4 in October.
Analysts were expecting the index to ease down to 55.0 last month.
In addition, the U.S. Census Bureau said new home sales rose by 25.4% to a seasonally adjusted 444,000 units in November, beating expectations for an increase to 428,000 and hitting a four-month high
A separate report showed that the U.S. trade deficit narrowed to a seasonally adjusted USD40.6 billion in October from a USD43.0 billion deficit in September, whose figure was revised from a previously reported deficit of USD41.8 billion.
Analysts had expected the U.S. trade deficit to narrow to USD40 billion in October.
Meanwhile across the Atlantic Ocean, London-based Markit Economics said the U.K. services purchasing managers index fell to 60.0 in November from 62.5 in October, which was the strongest since May 1997.
Analysts were expecting the index to decline to 62.0 last month.
The pound, meanwhile, was down against the euro and down against the yen, with EUR/GBP up 0.09% at 0.8298 and GBP/JPY down 0.45% at 167.31.
On Thursday, the Bank of England is to announce its benchmark interest rate.
The U.S. is to publish a revised estimate of third-quarter gross domestic product, while the Labor Department is to release its weekly report on initial jobless claims. The U.S. is also to publish data on factory orders.
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