Forex - GBP/USD gains on soft U.S. pricing data, solid U.K. jobs report

Investing.com - The pound traded higher against the dollar on Wednesday after U.S. wholesale pricing data came in short of expectations while a U.K. jobs report met market consensus.

In U.S. trading on Wednesday, GBP/USD was trading at 1.5512, up 0.41%, up from a session low of 1.5423 and off from a high of 1.5546.

Cable was likely to find support at 1.5207, the low from Aug. 7, and resistance at 1.5574, Thursday's high.

The U.K. unemployment rate remained unchanged at 7.8% in June, according to the Office of National Statistics, in line with expectations.

The number of individuals claiming unemployment benefits fell by 29,200 in July, better than expectations for a decline of 15,000, which gave the pound support as did the minutes of the Bank of England's July meeting, which showed that the decision to provide forward guidance on future rate increases was not unanimous.

The BoE has established conditions under which forward guidance on rates would not apply. One of these says bank will consider raising rates if medium term inflation expectations rise above 2.5% over 18 to 24 months.

Monetary Policy Committee member Martin Weale called for tougher measures to ensure that the pledge to hold rates at record lows did not lead to a pickup in inflation though he did say he accepted the principles of forward guidance.

Last week the BoE announced plans to keep interest rates on hold at record lows as long as the U.K. unemployment rate remains above 7%.

Meanwhile in the U.S., the Department of Labor reported that the country's producer price index came in flat last month, missing expectations for a 0.3% increase after a 0.8% increase in June.

The core producer price index rose 0.1% in July, missing forecasts for a 0.2% increase.

A weak producer price index suggest inflationary pressures remain soft and stokes expectations that the Federal Reserve will keep the economy on monetary support.

The numbers dampened expectations that U.S. recovery is strong enough for the Federal Reserve to begin tapering its USD85 billion-a-month asset-purchasing program in the near future, which has kept the dollar weak since its inception.

The pound, meanwhile, was up against the euro and up against the yen, with EUR/GBP down 0.42% at 0.8548 and GBP/JPY up 0.34% at 152.23.

On Thursday, the U.K. is to release official data on retail sales.

The U.S. will release data on consumer inflation, jobless claims, industrial production and manufacturing data from the New York and Philadelphia Federal Reserve branches.

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