Investing.com - The pound fell to a three-week low against the U.S. dollar on Friday, as safe-haven demand for the greenback was bolstered by fears that ongoing political upheaval in Greece could exacerbate the debt crisis in the euro zone.
GBP/USD hit 1.6181 on Thursday, the pair’s highest since May 8; the pair subsequently consolidated at 1.6065 by close of trade on Friday, shedding 0.42% over the week.
Cable was likely to find support at 1.6008, the low of April 19 and resistance at 1.6152, Friday’s high.
Market sentiment was hit by increasing expectations that a fresh round of elections in Greece is inevitable, after attempts to form a coalition government failed.
On Friday, Alexis Tsipras, the head of Greece’s largest anti-bailout party Syriza, rejected a coalition with Socialists and Conservatives, fuelling concerns over the country’s ability to abide by the terms of its EUR130 billion bailout agreement.
Rating agency Fitch warned Friday that it would place the ratings of all euro zone members on review pending possible downgrades, if Greece was to exit the euro zone as a result of its current crisis.
Meanwhile, speculation over the health of Spain’s troubled banking system and the government’s ability to cut one of the largest deficits in the euro area also weighed on market sentiment.
The greenback also found support after U.S. data showed that consumer confidence hit a more than four-year high in May.
The University of Michigan said that its index of consumer sentiment rose to 77.8, from a reading of 76.4 in April, defying expectations for an unchanged reading.
A separate report showed that U.S. producer price inflation fell unexpectedly in April.
Sterling pulled away from a three-and-a-half year high against the euro on Friday, trimming a weekly gain, with EUR/GBP settling at 0.8034 by close of trade, still down 0.32% on the week.
The pound had pushed higher against the greenback and the euro on Thursday after the Bank of England kept its benchmark interest rate on hold at 0.5% and announced no change to the size of its asset purchase program.
In the week ahead, investors will be watching developments in Greece as well as the first talks between the new French President Francois Hollande and German Chancellor Angela Merkel, amid fears that Hollande’s focus on growth rather than austerity measures as a means to tackle the euro zone crisis could spark tensions with Germany.
The U.S. is to produce government data on retail sales and inflation, while the Federal Reserve is to publish the minutes of this month’s policy setting meeting.
In addition, the BoE is to publish its closely watched inflation report.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, May 14
The U.S. is to produce a report on mortgage delinquencies, an important signal of the housing market’s health.
Tuesday, May 15
The U.S. is to publish official data on retail sales, the leading indicator of consumer spending, which accounts for the majority of overall economic activity. The country is also to publish official data on consumer price inflation, which accounts for a majority of overall inflation. Reports on manufacturing activity in New York, as well as U.S. net long-term securities transactions and business inventories are also due for release.
Wednesday, May 16
The U.K. is to publish official data on claimant count change, an important signal of overall economic health, as well as on the unemployment rate. Meanwhile, BoE Governor Mervyn King is due to speak ahead of the release of the bank’s inflation report.
Also Wednesday, the U.S. is to produce official data on building permits and housing starts, followed by reports by the Federal Reserve on the capacity utilization rate and industrial production. Government data is also to be released on crude oil inventories ahead of the minutes of the Fed’s latest policy meeting.
Thursday, May 17
The U.S. is to produce government data on unemployment claims, followed by a report on manufacturing activity in the Philadelphia area.
Friday, May 18
The members of the Group of Eight nations are to begin talks in Camp David, hosted by U.S. President Barak Obama.
GBP/USD hit 1.6181 on Thursday, the pair’s highest since May 8; the pair subsequently consolidated at 1.6065 by close of trade on Friday, shedding 0.42% over the week.
Cable was likely to find support at 1.6008, the low of April 19 and resistance at 1.6152, Friday’s high.
Market sentiment was hit by increasing expectations that a fresh round of elections in Greece is inevitable, after attempts to form a coalition government failed.
On Friday, Alexis Tsipras, the head of Greece’s largest anti-bailout party Syriza, rejected a coalition with Socialists and Conservatives, fuelling concerns over the country’s ability to abide by the terms of its EUR130 billion bailout agreement.
Rating agency Fitch warned Friday that it would place the ratings of all euro zone members on review pending possible downgrades, if Greece was to exit the euro zone as a result of its current crisis.
Meanwhile, speculation over the health of Spain’s troubled banking system and the government’s ability to cut one of the largest deficits in the euro area also weighed on market sentiment.
The greenback also found support after U.S. data showed that consumer confidence hit a more than four-year high in May.
The University of Michigan said that its index of consumer sentiment rose to 77.8, from a reading of 76.4 in April, defying expectations for an unchanged reading.
A separate report showed that U.S. producer price inflation fell unexpectedly in April.
Sterling pulled away from a three-and-a-half year high against the euro on Friday, trimming a weekly gain, with EUR/GBP settling at 0.8034 by close of trade, still down 0.32% on the week.
The pound had pushed higher against the greenback and the euro on Thursday after the Bank of England kept its benchmark interest rate on hold at 0.5% and announced no change to the size of its asset purchase program.
In the week ahead, investors will be watching developments in Greece as well as the first talks between the new French President Francois Hollande and German Chancellor Angela Merkel, amid fears that Hollande’s focus on growth rather than austerity measures as a means to tackle the euro zone crisis could spark tensions with Germany.
The U.S. is to produce government data on retail sales and inflation, while the Federal Reserve is to publish the minutes of this month’s policy setting meeting.
In addition, the BoE is to publish its closely watched inflation report.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, May 14
The U.S. is to produce a report on mortgage delinquencies, an important signal of the housing market’s health.
Tuesday, May 15
The U.S. is to publish official data on retail sales, the leading indicator of consumer spending, which accounts for the majority of overall economic activity. The country is also to publish official data on consumer price inflation, which accounts for a majority of overall inflation. Reports on manufacturing activity in New York, as well as U.S. net long-term securities transactions and business inventories are also due for release.
Wednesday, May 16
The U.K. is to publish official data on claimant count change, an important signal of overall economic health, as well as on the unemployment rate. Meanwhile, BoE Governor Mervyn King is due to speak ahead of the release of the bank’s inflation report.
Also Wednesday, the U.S. is to produce official data on building permits and housing starts, followed by reports by the Federal Reserve on the capacity utilization rate and industrial production. Government data is also to be released on crude oil inventories ahead of the minutes of the Fed’s latest policy meeting.
Thursday, May 17
The U.S. is to produce government data on unemployment claims, followed by a report on manufacturing activity in the Philadelphia area.
Friday, May 18
The members of the Group of Eight nations are to begin talks in Camp David, hosted by U.S. President Barak Obama.