Investing.com - The pound fell to more than one-month lows against the broadly stronger dollar on Friday after data showing that the U.S. economy added far more jobs than expected last month underlined expectations for higher interest rates.
The Labor Department reported that the U.S. economy added 295,000 jobs in February, far more than the 240,000 forecast by economists. The unemployment rate ticked down to 5.5% from 5.7% in January, the lowest since May 2008. Economists had forecast the unemployment rate would fall to 5.6%.
The robust jobs report fuelled expectations that the Federal Reserve will start raising interest rates around the middle of this year.
The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, jumped 1.39% to 97.74 late Friday, the highest since September 2003.
GBP/USD was down 1.34% to 1.5036 in late trade, the lowest level since February 3.
Meanwhile, sterling touched fresh seven-year lows against the euro, one day after European Central Bank President Mario Draghi confirmed that it will begin purchasing euro zone government bonds on Monday under its new quantitative easing program.
The combined monthly asset purchases will amount to €60 billion per month and are expected to run until September 2016, or until the ECB sees that inflation is on a “sustained path” to its target of close to, but below, 2%.
Draghi also said that the ECB expects to see higher growth and inflation over the coming years.
In the week ahead, markets will be watching Thursday’s U.S. retail sales report for further indications on the strength of the recovery, while Wednesday’s report on U.K. industrial output will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday as there are no relevant events on this day.
Tuesday, March 10
The U.S. is to release data on wholesale inventories.
Wednesday, March 11
The U.K. is to produce data on industrial and manufacturing production.
Thursday, March 12
The U.K. is to publish a report on the trade balance.
The U.S. is to produce data on retail sales and initial jobless claims.
Friday, March 13
The U.S. is to round up the week with data on producer prices and consumer sentiment.