Investing.com - The pound ended the week slightly lower against the U.S. dollar on Friday, as market sentiment was weighed by ongoing concerns over U.S. fiscal policy and concerns over the outlook for the U.K. economic recovery.
GBP/USD hit 1.5825 on Thursday, the pair’s lowest since September 5; the pair subsequently consolidated at 1.5880 by close of trade on Friday, down 0.13% on the week.
Cable is likely to find support at 1.5825, Thursday’s low and a two-month low and resistance at 1.5914, the high of November 12.
Demand for the greenback continued to remain underpinned amid concerns over the U.S. fiscal cliff, automatic tax hikes and spending cuts due to come into effect on January 1.
Congressional leaders said talks with President Barack Obama on Friday to avert the fiscal crisis were "constructive."
Concerns over Greece also continued to linger amid disagreements between the International Monetary Fund and Europe on how best to reduce Greece’s debt to manageable levels.
A decision on disbursing the country’s next tranche of aid, worth EUR31.5 billion, has been postponed until 20 November.
Sentiment on sterling remained weak after the Bank of England raised its forecast for short-term inflation on Wednesday and said growth would remain sluggish.
The BoE’s quarterly inflation report said that it will take until the third quarter of 2014 before inflation will fall below the bank’s 2% target, nine months longer than the bank forecast in August.
The report came after official data on Tuesday showed that the annual rate of consumer price inflation in the U.K. accelerated to a more than one-year high of 2.7% in October from 2.2% in September.
Separately, official data showed that that the number of people in the U.K. claiming unemployment benefits rose by a seasonally adjusted 10,100 in October, the largest increase since September 2011, compared to expectations for a decline of 5,100.
However, the unemployment rate ticked down to 7.8% from 7.9% in September, against forecasts for an unchanged reading.
Data on Thursday showed that U.K. retail sales dropped 0.8% in October, compared to expectations for a 0.1% fall.
In the week ahead market participants will be focusing on developments relating to the U.S. fiscal cliff, as well as Tuesday’s meeting of the euro group of finance ministers to discuss unlocking Greece’s next aid installment.
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 19
The U.K. is to release industry data on house price inflation, a leading indicator of demand in the housing sector.
Later Monday, the U.S. is to release industry data on existing home sales, a leading indicator of economic health.
Tuesday, November 20
The U.S. is to publish official data on building permits, an excellent gauge of future construction activity, as well as data on housing starts.
Wednesday, November 21
The BoE is to publish the minutes of its most recent policy setting meeting, which give investors an insight into the bank’s view on the outlook for growth and inflation. The U.K. is also to publish official data on public sector borrowing.
Later Wednesday, the U.S. is to release weekly government reports on initial jobless claims and crude oil inventories. This data is being released one day early ahead of the Thanksgiving holiday on Thursday.
In addition, the University of Michigan is to release revised data on consumer sentiment and inflation expectations.
Thursday, November 22
The U.K. is to release industry data on retail sales, an important indicator of economic health.
GBP/USD hit 1.5825 on Thursday, the pair’s lowest since September 5; the pair subsequently consolidated at 1.5880 by close of trade on Friday, down 0.13% on the week.
Cable is likely to find support at 1.5825, Thursday’s low and a two-month low and resistance at 1.5914, the high of November 12.
Demand for the greenback continued to remain underpinned amid concerns over the U.S. fiscal cliff, automatic tax hikes and spending cuts due to come into effect on January 1.
Congressional leaders said talks with President Barack Obama on Friday to avert the fiscal crisis were "constructive."
Concerns over Greece also continued to linger amid disagreements between the International Monetary Fund and Europe on how best to reduce Greece’s debt to manageable levels.
A decision on disbursing the country’s next tranche of aid, worth EUR31.5 billion, has been postponed until 20 November.
Sentiment on sterling remained weak after the Bank of England raised its forecast for short-term inflation on Wednesday and said growth would remain sluggish.
The BoE’s quarterly inflation report said that it will take until the third quarter of 2014 before inflation will fall below the bank’s 2% target, nine months longer than the bank forecast in August.
The report came after official data on Tuesday showed that the annual rate of consumer price inflation in the U.K. accelerated to a more than one-year high of 2.7% in October from 2.2% in September.
Separately, official data showed that that the number of people in the U.K. claiming unemployment benefits rose by a seasonally adjusted 10,100 in October, the largest increase since September 2011, compared to expectations for a decline of 5,100.
However, the unemployment rate ticked down to 7.8% from 7.9% in September, against forecasts for an unchanged reading.
Data on Thursday showed that U.K. retail sales dropped 0.8% in October, compared to expectations for a 0.1% fall.
In the week ahead market participants will be focusing on developments relating to the U.S. fiscal cliff, as well as Tuesday’s meeting of the euro group of finance ministers to discuss unlocking Greece’s next aid installment.
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 19
The U.K. is to release industry data on house price inflation, a leading indicator of demand in the housing sector.
Later Monday, the U.S. is to release industry data on existing home sales, a leading indicator of economic health.
Tuesday, November 20
The U.S. is to publish official data on building permits, an excellent gauge of future construction activity, as well as data on housing starts.
Wednesday, November 21
The BoE is to publish the minutes of its most recent policy setting meeting, which give investors an insight into the bank’s view on the outlook for growth and inflation. The U.K. is also to publish official data on public sector borrowing.
Later Wednesday, the U.S. is to release weekly government reports on initial jobless claims and crude oil inventories. This data is being released one day early ahead of the Thanksgiving holiday on Thursday.
In addition, the University of Michigan is to release revised data on consumer sentiment and inflation expectations.
Thursday, November 22
The U.K. is to release industry data on retail sales, an important indicator of economic health.