Investing.com - The pound rose to almost three-week highs against the dollar on Friday on the back of expectations that the Federal Reserve will keep its stimulus program in place for longer following dovish remarks by Fed Chairwoman nominee Janet Yellen.
GBP/USD closed Friday’s session at 1.6118, compared to Thursday’s close of 1.6064. For the week, the pair rose 0.84%.
Cable was likely to find support at 1.5987, Thursday’s low and resistance at 1.6200.
The greenback turned lower after testimony from Federal Reserve Vice Chairwoman Janet Yellen on Thursday was seen as cementing the view that the bank will keep its USD85 billion-a-month asset purchase program in place until early next year.
Ms. Yellen said it was "imperative" that the Fed does everything in its power to ensure a robust recovery. She said the quantitative easing program would not continue indefinitely but the timescale for reducing it would be data dependent.
The comments came during a Senate confirmation hearing to take over from Ben Bernanke as head of the central bank in February.
Sentiment on the greenback was also hit by unexpectedly weak U.S. manufacturing data on Friday.
The Federal Reserve’s Empire state manufacturing index fell to -2.21 this month from 1.52 in October. Economists had forecast a rise to 5.0.
A separate report showed that U.S. industrial production fell 0.1% in October, after rising by 0.7% in September, compared to expectations for a 0.2% increase.
Demand for the pound continued to be underpinned after the Bank of England brought forward the date it expects the unemployment rate to hit the 7% threshold at which it will consider raising rates and revised up its forecast for growth in its quarterly inflation report on Wednesday.
The BoE said it now expects economic growth of 1.6% this year, up from 1.4% in August and growth of 2.8% in 2014, up from 2.5%. The bank still expects growth of 2.3% in 2015.
In the week ahead, investors will be closely watching Wednesday’s minutes of the Fed’s most recent policy setting meeting, while the BoE is to publish its November meeting minutes. The U.S. is also to release data on retail sales and consumer prices.
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 Friday as there are no relevant events on this day.
Monday, November 18
The U.S. is to release private sector data on the outlook for the housing sector.
Tuesday, November 19
The U.S. is to release data on the employment cost index, an important inflationary indicator.
Wednesday, November 20
The BoE is to publish the minutes of its most recent policy setting meeting.
The U.S. is to release a series of data including a report on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The nation is also to publish data on consumer inflation, existing home sales and business inventories.
Later Wednesday, the Federal Reserve is to publish what will be the closely watched minutes of its latest policy meeting.
Thursday, November 21
The U.K. is to release data on public sector net borrowing.
The U.S. is release data on producer price inflation, as well as the weekly report on initial jobless claims. The U.S. is also to release data manufacturing activity from the Philly Fed.
GBP/USD closed Friday’s session at 1.6118, compared to Thursday’s close of 1.6064. For the week, the pair rose 0.84%.
Cable was likely to find support at 1.5987, Thursday’s low and resistance at 1.6200.
The greenback turned lower after testimony from Federal Reserve Vice Chairwoman Janet Yellen on Thursday was seen as cementing the view that the bank will keep its USD85 billion-a-month asset purchase program in place until early next year.
Ms. Yellen said it was "imperative" that the Fed does everything in its power to ensure a robust recovery. She said the quantitative easing program would not continue indefinitely but the timescale for reducing it would be data dependent.
The comments came during a Senate confirmation hearing to take over from Ben Bernanke as head of the central bank in February.
Sentiment on the greenback was also hit by unexpectedly weak U.S. manufacturing data on Friday.
The Federal Reserve’s Empire state manufacturing index fell to -2.21 this month from 1.52 in October. Economists had forecast a rise to 5.0.
A separate report showed that U.S. industrial production fell 0.1% in October, after rising by 0.7% in September, compared to expectations for a 0.2% increase.
Demand for the pound continued to be underpinned after the Bank of England brought forward the date it expects the unemployment rate to hit the 7% threshold at which it will consider raising rates and revised up its forecast for growth in its quarterly inflation report on Wednesday.
The BoE said it now expects economic growth of 1.6% this year, up from 1.4% in August and growth of 2.8% in 2014, up from 2.5%. The bank still expects growth of 2.3% in 2015.
In the week ahead, investors will be closely watching Wednesday’s minutes of the Fed’s most recent policy setting meeting, while the BoE is to publish its November meeting minutes. The U.S. is also to release data on retail sales and consumer prices.
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 Friday as there are no relevant events on this day.
Monday, November 18
The U.S. is to release private sector data on the outlook for the housing sector.
Tuesday, November 19
The U.S. is to release data on the employment cost index, an important inflationary indicator.
Wednesday, November 20
The BoE is to publish the minutes of its most recent policy setting meeting.
The U.S. is to release a series of data including a report on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The nation is also to publish data on consumer inflation, existing home sales and business inventories.
Later Wednesday, the Federal Reserve is to publish what will be the closely watched minutes of its latest policy meeting.
Thursday, November 21
The U.K. is to release data on public sector net borrowing.
The U.S. is release data on producer price inflation, as well as the weekly report on initial jobless claims. The U.S. is also to release data manufacturing activity from the Philly Fed.