Investing.com - The pound rallied against the dollar and the euro on Friday after Prime Minister David Cameron’s Conservative Party won a surprise majority in British elections, easing concerns over the prospects of lengthy coalition negotiations.
GBP/USD hit highs of 1.5521, the most since February 26 and ended at 1.5456, up 1.39% for the day.
EUR/GBP hit lows of 0.7226 before finishing at 0.7251, a loss of 1.85% for the day.
Ahead of the elections sentiment on sterling had been hit as opinion polls pointing to a hung parliament fuelled concerns over the likelihood of an unstable coalition government.
In the U.S., the latest employment report showed that job creation rebounded in April, but also included a sharp downward revision to the previous month’s figure.
The Labor Department reported that the U.S. economy added 223,000 jobs in April, just shy of economists forecast for 224,000. The unemployment rate ticked down from 5.5% to 5.4%, the lowest since May 2008.
But March’s payrolls report was revised to show that only 85,000 jobs were created, the fewest since June 2012.
The data did little to alter expectations that the Federal Reserve will keep rates on hold at current record lows until later in the year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, hit highs of 95.17 after the data, before pulling back to 94.9 in late trade. The index ended the week down 0.57%, its fourth consecutive weekly loss.
In the week ahead investors will be turning their attention to U.S. data on retail sales and consumer sentiment for fresh indications on the strength of the economic recovery.
Monday’s monetary policy announcement by the Bank of England and Wednesday’s U.K. inflation report 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.
Monday, May 11
The Bank of England is to announce its monetary policy decision.
Tuesday, May 12
The U.K. is to release a report on industrial and manufacturing production.
In the euro zone, the Economic and Financial Affairs Council is to hold talks in Brussels.
Wednesday, May 13
The U.K. is to release the latest employment report, which is to be followed by the BoE’s quarterly inflation report.
The U.S. is to publish data on retail sales.
Thursday, May 14
The U.S. is to publish reports on producer prices and initial jobless claims.
Friday, May 15
The U.S. is to round up the week with reports on industrial production, manufacturing activity in the New York region and consumer sentiment.