Investing.com - The pound was steady against the dollar on Thursday after the Bank of England left monetary policy on hold, as investors remained cautious ahead of the European Central Bank’s policy announcement later in the session and Friday’s U.S. jobs report.
GBP/USD was down just 0.03% to 1.3512 following the announcement.
Cable was likely to find support at 1.6180 and resistance at 1.6400.
The BoE voted to leave interest rates steady at record lows of 0.5%, where they have been unchanged since March 2009.
The bank also made no change to its quantitative easing program, which remains at 375 billion pounds.
The decision came one day after data that activity in the U.K.’s dominant service sector eased in January, but growth remained solid, indicating that the economic recovery is on track.
The report showed that price pressures for service firms picked up only slightly last month, giving the central bank leeway to keep policy loose for longer while the economic recovery continues.
Safe haven demand for the dollar continued to be underpinned ahead of Friday’s U.S. nonfarm payrolls report for January, after poor U.S. manufacturing data earlier in the week sparked concerns over a possible slowdown in the economic recovery.
Data released on Wednesday showed that the U.S. service sector expanded at the fastest rate in four months in January, while another report showed that the U.S. private sector added 175,000 jobs in January, below expectations for jobs growth of 180,000.
Sterling edged higher against the euro, with EUR/GBP dipping 0.09% to 0.8290 ahead of the ECB rate announcement later Thursday, amid speculation that the bank may tighten monetary policy in order to stave off the risk of deflation.
Data last week showed that the annual rate of inflation in the euro zone slowed to 0.7% in January. It was the fourth consecutive month the inflation rate came in at less than 1% and was well below the ECB’s target of 2%.
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