Forex - GBP/USD falls as lackluster reports prompt profit taking

The pound weakened against the dollar on Thursday after lackluster service-sector and housing data out of the U.K. sent investors selling sterling for profits.

In U.S. trading on Thursday, GBP/USD was trading at 1.6160, down 0.39%, up from a session low of 1.6156 and off from a high of 1.6241.

Cable was likely to find support at 1.6128, Monday's low, and resistance at 1.6260, Tuesday's high.

In the U.K. earlier, the Markit research firm said its services purchasing manager's index ticked down to 60.3 in September from 60.5 in August, albeit better than expectations for a decline to 60.0. 

A separate report showed that house price inflation in the U.K. rose 0.3% last month, confounding expectations for a 0.5% increase after a downwardly revised 0.3% uptick in August.

The tame data sparked a round of profit-taking, as investors viewed the pound as due for a breather, especially after hitting nine-month highs against the greenback in recent sessions.

Meanwhile in the U.S., soft data dampened the dollar's advance.

The Institute of Supply Management reported earlier that its non-manufacturing purchasing manager's index fell to a three-month low of 54.4 in September from 58.6 in August. 
Analysts were expecting the index to decline to 57.4 last month. 

Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending Sept. 28 rose by 1,000 to a seasonally adjusted 308,000, better than analysts' calls for jobless claims to rise by 6,000 to 313,000 last week. 

Jobless claims for the preceding week were revised up to a gain of 307,000 from a previously reported increase of 305,000. 

An ongoing U.S. government shutdown continued to dampen demand for the greenback.

President Barack Obama met with Republican and Democratic leaders in Congress on Wednesday, although a solution still seemed unlikely.

Markets were also considering how the political deadlock will affect negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by Oct. 17.

The pound, meanwhile, was down against the euro and down against the yen, with EUR/GBP up 0.71% at 0.8430 and GBP/JPY down 0.49% at 157.17.

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U.S. stocks dip on Capitol shooting, shutdown jitters; Dow down 0.90%

U.S. stocks fell on Thursday after a shooting took place near Capitol Hill, which rattled nerves even though the event appeared to be an isolated incident.

A government shutdown entered its third day on Thursday, which also soured investors' appetite for stocks as did lukewarm U.S. data.

At the close of U.S. trading, the Dow Jones Industrial Average finished down 0.90%, the S&P 500 index also fell 0.90%, while the Nasdaq Composite index fell 1.07%.

A woman reportedly driving a car with a child who tried to break through a barrier near the White House was reportedly killed near the Capitol in a police chase shortly afterwards.

The incidient involved multiple gunshots.

Stocks dropped amid concerns that the incident took place during a government shutdown, and while the shooting appeared to be an isolated event, prices remained lower as calm returned to Washington.

Elsewhere, the Institute of Supply Management reported that its non-manufacturing purchasing manager's index fell to a three-month low of 54.4 in September from 58.6 in August. 

Analysts were expecting the index to decline to 57.4 last month. 

Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending Sept. 28 rose by 1,000 to a seasonally adjusted 308,000, better than analysts' calls for jobless claims to rise by 6,000 to 313,000 last week. 

Jobless claims for the preceding week were revised up to a gain of 307,000 from a previously reported increase of 305,000. 

An ongoing U.S. government shutdown continued to dampen stock prices.

President Barack Obama met with Republican and Democratic leaders in Congress on Wednesday, although a solution still seemed unlikely though House speaker John Boehner did say earlier the U.S. will not default on its debts.

Markets continued to fret the political deadlock will affect negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by Oct. 17.

Leading Dow Jones Industrial Average performers included Verizon, up 0.47%, Merck, which was unchanged, and UnitedHealth Group, which was down 0.07%.

The Dow Jones Industrial Average's worst performers included Boeing, down 2.18%, Chevron, down 2.12%, and DuPont, down 2.07%.

European indices, meanwhile, finished largely lower.

After the close of European trade, the EURO STOXX 50 fell 0.58%, France's CAC 40 fell 0.73%, while Germany's DAX 30 fell 0.37%. Meanwhile, in the U.K. the FTSE 100 finished up 0.18%.

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Gold falls on profit taking, soft U.S. service report supports

Gold prices slumped on Thursday after investors locked in gains and sold for profits.

A U.S. government shutdown that weakened the dollar on Wednesday bolstered the yellow metal to levels ripe for profit taking, though a lackluster industry report on the service sector curbed losses by keeping expectations going for the Federal Reserve to keep stimulus programs in place for now.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,316.50 during U.S. afternoon hours, down 0.32%.

Gold prices hit a session low of USD1,302.30 a troy ounce and high of USD1,321.80 a troy ounce.

Gold futures were likely to find support at USD1,278.20 a troy ounce, Wednesday's low, and resistance at USD1,375.10, the high from Sept. 19.

The December contract settled up 2.69% at USD1,320.70 a troy ounce on Wednesday.

An ongoing U.S. government shutdown continued to dampen demand for the greenback and sent gold prices climbing to levels ripe for profit taking.

President Barack Obama met with Republican and Democratic leaders in Congress on Wednesday, although a solution still seemed unlikely.

Markets were also considering how the political deadlock will affect negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by Oct. 17.

Elsewhere, soft U.S. service-sector data supported prices somewhat.

The Institute of Supply Management reported earlier that its non-manufacturing purchasing manager's index fell to a three-month low of 54.4 in September from 58.6 in August. 
Analysts were expecting the index to decline to 57.4 last month. 

Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending Sept. 28 rose by 1,000 to a seasonally adjusted 308,000, better than analysts' calls for jobless claims to rise by 6,000 to 313,000 last week. 

Jobless claims for the preceding week were revised up to a gain of 307,000 from a previously reported increase of 305,000. 

The spotty data kept expectations firm that the Federal Reserve will likely keep its USD85 billion monthly bond-buying program in place through December.
Fed asset purchases drive down interest rates to spur recovery, weakening the dollar in the prices and making gold an attractive hedge. 

Elsewhere on the Comex, silver for December delivery was down 0.66% at USD21.752 a troy ounce, while copper for December delivery was down 1.28% and trading at USD3.274 a pound.

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