The pound slipped 0.3 per cent against the dollar at $1.113 this afternoon after US labour figures suggested stronger than expected jobs growth.
US employers added 263,000 jobs in September as the country’s unemployment rate dropped to 3.5 per cent, figures from the Bureau of Labour Statistics show.
Economists polled by Reuters had previously expected US employers would add 250,000 jobs in September.
While the pound has rallied from its record low of $1.03 a few weeks back following the mini-budget. analysts warned that buoyant growth could further sting the sterling against the dollar.
The pound had been above $1.12 before the jobs figures were released, but soon dropped.
“Although this month’s jobs report is weaker than the figures recorded last month, the labour market remains relatively strong,” said Richard Flynn, managing director at Charles Schwab UK.
“The Fed has been increasingly clear that substantial weakness in the economy may be the expense for a return to lower inflation. As rate hikes feed through to the real economy in the months ahead, the labour market may weaken further, reflecting investors’ recessionary concerns.”
However, the FTSE 100 seems to be going strong this afternoon despite another turbulent week.
The blue-chip index saw a small tick up (+0.1 per cent) in early trade, with defence, banking, utilities and energy stocks leading the way.
In particular energy stocks BP and Shell gave a much-needed boost to the index after oil prices climbed following Opec’s agreement to cut production by 2m barrels a day: the biggest since the pandemic.
B&Q owner Kingfisher, Ocado and Frasers Group were the biggest fallers of morning as consumer confidence continues to be knocked.
The FTSE 250 was also down 0.6 per cent, with landscaping firm Marshalls dragging with a near 26 per cent crash this morning following disappointing results.