Firm dollar pushed the British pound to four-month lows

On Monday British pound traded close to four-month lows versus the US dollar, following the stronger than expected employment data from the United States on July 5th.

GBP/USD pair fell to a session low at 1.4858 during early European trade, after which consolidation followed at 1.4877. The cross was down by 0.17% for the day. Support was likely to be received at July 5th low and a four-month low, 1.4856, while resistance was to be encountered at 1.4950.

On July 4th Bank of England’s Monetary Policy Committee put its base interest rate on hold at a record low 0.50% and the targeted level of asset purchases at 375 billion GBP. Also, it became clear that monetary policy was not to be tightened as soon as most investors had expected, because economic indicators were still not convincing enough.

In the mean time, demand for the greenback was bolstered after the Bureau of Labor Statistics in the United States reported on July 5th, that US economy managed to add 195 000 new job positions in June, significantly above the expected number of 165 000, while in May another 195 000 jobs were added. US Unemployment rate remained without changes at 7.6% in the month of June.

Pound was lower against the euro as well, with EUR/GBP cross advancing 0.19% to 0.8628 at 8:48 GMT. Later in the trading day Germany was expected to release information, regarding industrial production. Initial estimates pointed drops both on a monthly and annual basis in May.