Investing.com - The pound was trading close to 11-month lows against the dollar on Monday, after Friday’s robust U.S. jobs report boosted expectations for a rate hike, and U.K. data indicated that the pace of the economic recovery may be moderating.
GBP/USD edged up to trade at 1.5985, hovering just above Friday’s lows of 1.5950, the weakest level since November 2013.
Demand for the dollar continued to be underpinned after the Labor Department reported on Friday that the U.S. economy added 248,000 jobs in September, outstripping expectations for jobs growth of 215,000. The unemployment rate ticked down to 5.9%, the lowest level since July 2008.
The upbeat data reinforced expectations that the strengthening economic recovery may prompt the Federal Reserve to raise interest rates by mid-2015.
The dollar edged lower against a basket of other major currencies on Monday as investors consolidated gains following the greenbacks recent run higher.
The US Dollar Index, which tracks the performance of the greenback against a basket of six major currencies, was down 0.30% to 86.52, off Friday’s four-year peaks of 86.79.
It notched up its twelfth consecutive weekly gain last week, the longest rally since the index was created in 1971.
Sterling struggled to build on gains after data released earlier on Friday showed that output in the U.K. services sector eased slightly in September, indicating that the economic recovery may be moderating.
The U.K. services purchasing managers index ticked down to a three month low of 58.7 from 60.5 in August.
A report earlier in the week showed that activity in the U.K.’s manufacturing sector slowed to a 17 month low in September.
The data was seen as increasing the likelihood that the Bank of England will leave rates on hold until next year.
Elsewhere, the euro gained ground against sterling, with EUR/GBP rising 0.26% to 0.7856.
The euro’s gains came in spite of data on Monday showing that German factory orders fell 5.7% in August, compared to expectations for a 2.5% decline. It was the largest drop since early 2009, adding to concerns over the outlook for the euro zone’s largest economy.
The European Central Bank refrained from implementing additional stimulus measures at its meeting last week, indicating that it will wait to see the effects of recent stimulus measures on the region’s economy.