Investing.com - The pound ended the week close to five-week lows against the dollar on Friday as growing expectations that the Federal Reserve could raise interest rates sooner than anticipated supported the dollar.
GBP/USD edged down 0.10% to 1.6485 on Friday, the weakest level since February. For the week, the pair lost 0.91%.
Cable is likely to find support at 1.6400 and resistance at 1.6567, Thursday’s high.
The dollar rallied on Wednesday after Fed Chair Janet Yellen indicated that the bank could begin to raise interest rates about six months after its bond-buying program winds up, which is expected to happen this fall.
The comments prompted investors to bring forward expectations for a rate hike to as soon as March of next year.
The Fed also reduced its monthly bond purchases by an additional $10 billion to $55 billion at the conclusion of its two-day policy meeting, and said there was “underlying strength in the broader economy.”
In the U.K., Wednesday’s minutes of the Bank of England’s March meeting indicated that the economic recovery in the U.K. is broadening, but still has some way to go before it is sustainable. The monetary policy committee voted unanimously to keep interest rates at a record low 0.5% this month, the minutes said.
Also Wednesday, official data showed that the U.K. unemployment rate remained unchanged at 7.2% in the three months to January. The number of people claiming unemployment benefits in the U.K. fell by a larger-than-forecast 34,600 in February, indicating that the recovery in the labor market is continuing.
In the coming week, investors will be looking ahead to U.S. data from the housing sector, as well as reports on consumer confidence and durable goods. The U.K. is to publish reports on inflation and retail sales.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 24
The U.S. is to release preliminary data on manufacturing activity.
Tuesday, March 25
The U.K. is to release data on consumer price inflation, which accounts for the majority of overall inflation. The nation is also to release private sector data on retail sales.
Later Tuesday, the U.S. is to release report on house price inflation and consumer confidence, as well as official data on new home sales.
Wednesday, March 26
The U.S. is to release data on durable goods orders, a leading indicator of production.
Thursday, March 27
The U.K. is to produce official data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
The U.S. is to publish final data on fourth quarter economic growth. The nation is also to release the weekly report on initial jobless claims and private sector data on pending home sales.
Friday, March 28
The U.K. is to release data on the current account and final data on fourth quarter growth.
The U.S. is to round up the week with a report on personal spending and revised data on consumer sentiment.