Investing.com – The pound gave back gains against the dollar on Monday after investors digested Friday’s soft U.S. jobs report and determined the numbers weren’t weak enough to deter the Federal Reserve from hiking interest rates in 2015.
In U.S. trading on Friday, GBP/USD was down 0.07% at 1.5861, up from a session low of 1.5853 and off a high of 1.5918.
Cable was likely to find support at 1.5788, Friday’s low, and resistance at 1.6023, last Wednesday’s high.
The dollar softened on Friday after the Department of Labor reported that the U.S. economy added 214,000 jobs in October, missing expectations for an increase of 231,000.
The U.S. unemployment rate ticked down to a six-year low of 5.8% from 5.9% in September.
While not overwhelmingly disappointing, the less-than-stellar report gave investors room to sell the greenback for profits and take time to rethink when the Federal Reserve will hike interest rates next year.
By Monday, investors snapped up fresh greenback positions on sentiments that the jobs report was strong enough to keep the Fed on track to hike interest rates some time in 2015 considering that the economy continues to add over 200,000 jobs a month save an anomaly here or there.
Elsewhere, sterling was up against the euro, with EUR/GBP down 0.15% at 0.7837, and up against the yen, with GBP/JPY up 0.05% at 181.99.
In Europe earlier, data released revealed that Italian industrial production fell 0.9% in September from August, confounding expectations for a 0.2% gain.
The soft report stoked concerns that Friday’s report on third quarter growth will show that Italy has fallen back into a recession after the economy contracted by 0.2% in the second quarter.
A separate report showed that the Sentix index of euro zone investor confidence improved modestly this month, though it still held close to 18-month lows.
Research group Sentix said its index of investor confidence improved to -11.9 this month from -13.7 in October, which was the lowest since May 2013.
Analysts had expected the index to improve to -6.9.