Forex News – GBP falls on weak jobs data and dovish BOE minutes

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The British pound fell against the dollar immediately after the release of UK unemployment data as well as the minutes from the Bank of England rate setting committee meeting.

The minutes from the June meeting showed that the bank’s MPC committee  have a dovish tone and votes show that more members were in favour of adopting further monetary easing measures given the poor economic situation in the UK.

Meanwhile weaker jobs numbers could also raise the likelihood of further QE from the BOE. Unemployment remains high, with the official rate at 8.2 percent in April, in line with expectations. Jobless claims were up by 8,200, more than the 4,000 fall expected.

The data signal the vulnerability of the British economy to the European debt crisis. A string of soft UK economic data recently has affected the country’s economic recovery, raising speculation at that the Bank of England will most probably take action soon to step up measures to boost growth. Further quantitative easing in the form of expanding the asset purchase program usually has a weakening effect on the British currency.

GBPUSD fell to a session low of 1.5651 after the minutes were released, plunging over 50 pips from around 1.5703 before the data. The pair soon recovered back to levels prior to the news .