Pound weakens as investors await US jobs report

BRUSSELS (dpa-AFX) – The pound fell against its main counterparts in the New York session on Tuesday as investors awaited key US economic data, including Friday’s nonfarm employment report for August, which was intended to gauge the size of the Federal Reserve’s rate cut later this month.

Friday’s U.S. jobs report is crucial as a seemingly cooling labor market could reignite recession fears and fuel speculation about a 50 basis point rate cut in mid-September.

Economists expect employment to increase by 165,000 jobs in August, after an increase of 114,000 jobs in July.

The unemployment rate is expected to fall slightly to 4.2 percent in August, from 4.3 percent in July.

Data from the British Retail Consortium showed that UK retail sales rose in August, driven mainly by food sales.

Total retail sales rose 1.0 percent year-on-year in August, but were lower than the 4.1 percent increase in the same period last year.

The pound fell to 5-day lows of 190.32 against the yen and 1.1118 against the franc, from early highs of 193.36 and 1.1209 respectively. The pound is likely to challenge support around 185.00 against the yen and 1.09 against the franc.

The pound fell to near a 2-week low of 1.3088 against the greenback and a 5-day low of 0.8434 against the euro, from an early high of 1.3148 and a 4-day high of 0.8406, respectively. The pound finds support around 1.27 against the greenback and 0.86 against the euro.

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