Pound to US Dollar (GBP/USD) Exchange Rate mixed as US jobs data disappoints

The Pound to US Dollar exchange rate (GBP/USD) strengthened on Friday after eagerly anticipated nonfarm payrolls data out of the US came in below economist forecasts, raising concerns over the strength of the world’s largest economy.

According to the US Labour Department US employers created an additional 192,000 jobs in March, a worse figure than the 200,000 expected by economists. February’s figure was revised upwards to 197,000 from a previous figure of 175,000.

The revision higher shows that the US economy was not as badly impacted by the winter storms as previously thought.

Economists had also been expecting the USA’s unemployment rate to fall to 6.6% but were disappointed as it in fact remained at 6.7%. Also disappointing was the fact that average hourly earnings remained stagnant at 0% change.

As a result of the data the US Dollar softened and came under pressure against the majority of its most traded peers including the Euro, Australian Dollar and Canadian Dollar.

The weaker-than-expected data is not expected to cause the Federal Reserve to reconsider tapering its quantitative easing measures.

“The falling unemployment rate remains frozen in its tracks at 6.7%, and payroll growth is materialising, albeit at a glacial pace, today’s figures will not quell the Federal Reserve’s tapering plans,” said an investment strategist at Signia Wealth.

Sterling was unable to take advantage of the disappointing jobs report due to its remaining under pressure from data which showed that the UK house price index softened unexpectedly in March. The index fell by 1.1% in March, contrary to economist forecasts for a rise of 0.7%.

The US Dollar could see gains as the US markets open for business.