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The pound slipped against the dollar after the headline U.S. jobs report beat expectations.
However, the losses are shallow as a deeper reading of the incoming data reveals a labour market that is struggling.
The November payroll report printed at 64K, which is above consensus estimates for 50K and explains the dollar's initial strength.
The pound to dollar exchange rate (GBP/USD) eased to 1.3410 in the minutes following the report before stabilising. The day's high is at 1.3450.
The dollar's advance will have been limited by the details of the October payrolls report, which was released alongside the November edition.
Here, there were net job losses of 105K, a figure that effectively wipes out the large gains in September of 108K (revised down from 119K).
Looking at the trend rate provided by the three-month rolling average, we have job creation of 22K.
Ali Jaffery, an economist at CIBC Capital Markets, says 22K is below or at the low end of estimates for breakeven unemployment.
Elsewhere, wage growth came in at 0.1% m/m in November, below the 0.3% consensus estimate.
The jobless rate rose to 4.56%, which was more than the 4.5% the market expected.
Given the soft tenor in the data, the Federal Reserve will be minded to lower interest rates further in the coming year.
"The rise in the unemployment rate is likely to be seen as a warning sign by Fed officials. Three interest rate cuts in the coming year are considered realistic," says Dr. Thomas Gitzel, Chief Economist at VP Bank.
The hope of lower rates will underpin global stock markets, while weighing on U.S. government bond yields and the dollar.
Given this, today's report should be enough to keep the year-end pound-dollar rally intact.
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