Pound to US Dollar (GBP/USD) Exchange Rate – Sterling pushes higher as US jobs data disappoints

The Pound advanced against the US Dollar in a session relatively devoid of economic data releases.

The Pound advanced against the US Dollar on Wednesday following the release of a weaker than expected US jobs report and a positive report out of the UK.

Sterling made gains after the Markit compiled employment index showed that British companies hired staff at the fastest rate seen since 1998. The index which combines the PMI data from the services, manufacturing and construction sectors rose to 56 last month, up from the 55.7 figure recorded in January.

The services PMI index from Markit/CIPS which was released earlier in the session edged slightly lower to 58.2 from 58.3 in January, but with anything above 50 indicating growth, economists said there was no cause for concern about the sector’s recovery.

The US Dollar meanwhile weakened after a report showed that US companies added fewer workers than expected in February. Economists had been hoping that the data would show a pickup in hiring. According to the ADP Research Institute based in New Jersey, employers added 139,000 jobs in February, below the expected number of 160,000. Economists are once again blaming the harsh winter weather for the weaker than expected figure.

“As you head to Friday’s payroll report, you are looking at another month of weather effect. It still suggests that things are improving but it’s hard to gauge the exact strength of the job market. Things should look less distorted in March and April. Spring will be make or break time for the economy,” said the chief economist at Raymond James.