Investing.com - The pound ended the week sharply higher against the weaker dollar on Friday amid expectations that the Federal Reserve will delay tapering stimulus measures in the aftermath of the U.S. government shutdown.
GBP/USD ended Friday’s session at 1.6165, almost unchanged for the day after rising to session highs of 1.6224. The pair ended the week with gains of 1.22%.
Cable is likely to find support at 1.6020 and resistance at 1.6260, the high of October 1 and a nine-month high.
On Wednesday the U.S. Congress passed a bill to reopen the government and raise the debt ceiling, with just hours to spare ahead of a deadline to avert an unprecedented sovereign debt default.
The deal will fund the government until January 15 and raise the government borrowing limit until February 7. Both sides also agreed to talks over broad budget issues in an attempt to reach a longer-term deal by December 13.
As fears over a default receded investors turned their attention to the economic impact of the 16-day government shutdown. The dollar slid amid fears that the Fed would delay plans for rolling back its asset purchase program until at least the beginning of next year.
The possibility of another debt crisis also remained, as the temporary solution does not resolve the underlying budgetary issues dividing Republicans and Democrats.
Sterling was boosted after data released on Thursday showed that retail sales in the U.K. rose at a faster than expected rate in September, adding to optimism over the outlook for third quarter growth.
The data came one day after a report showed that the number of people claiming unemployment benefits in the U.K. posted the largest decline since June 1997 in September.
The Office for National Statistics said that the U.K. claimant count fell by 41,700 in September, outstripping expectations for a decline of 25,000 people.
The rate of unemployment in the U.K. was steady at 7.7% in August, in line with expectations.
In the week ahead, U.S. data releases will be in focus after the shutdown delayed the release of some key economic reports. The Department of Labor is to publish the September nonfarm payrolls report on Tuesday and data on durable goods orders is to be released on Friday.
Meanwhile, the U.K. is to release preliminary data on third quarter growth, while the Bank of England is to publish the minutes of its latest policy meeting.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 21
The U.S. is to release private sector data on existing home sales, a leading indicator of demand in the housing sector.
Tuesday, October 22
The U.K. is to release data on public sector net borrowing.
The U.S. is to publish the September nonfarm payrolls report, which had been originally scheduled for release on October 4.
Wednesday, October 23
The BoE is to release the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.
Thursday, October 24
The U.K. is to publish private sector data on industrial order expectations. Later in the day, BoE Governor Mark Carney is to speak; his comments will be closely watched.
The U.S. is to release the weekly report on initial jobless claims, as well as data on new home sales.
Friday, October 25
The U.K. is to publish preliminary data on third quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth.
The U.S. is to round up the week with data on durable goods orders, a leading indicator of production, as well as revised data on consumer sentiment from the University of Michigan.
GBP/USD ended Friday’s session at 1.6165, almost unchanged for the day after rising to session highs of 1.6224. The pair ended the week with gains of 1.22%.
Cable is likely to find support at 1.6020 and resistance at 1.6260, the high of October 1 and a nine-month high.
On Wednesday the U.S. Congress passed a bill to reopen the government and raise the debt ceiling, with just hours to spare ahead of a deadline to avert an unprecedented sovereign debt default.
The deal will fund the government until January 15 and raise the government borrowing limit until February 7. Both sides also agreed to talks over broad budget issues in an attempt to reach a longer-term deal by December 13.
As fears over a default receded investors turned their attention to the economic impact of the 16-day government shutdown. The dollar slid amid fears that the Fed would delay plans for rolling back its asset purchase program until at least the beginning of next year.
The possibility of another debt crisis also remained, as the temporary solution does not resolve the underlying budgetary issues dividing Republicans and Democrats.
Sterling was boosted after data released on Thursday showed that retail sales in the U.K. rose at a faster than expected rate in September, adding to optimism over the outlook for third quarter growth.
The data came one day after a report showed that the number of people claiming unemployment benefits in the U.K. posted the largest decline since June 1997 in September.
The Office for National Statistics said that the U.K. claimant count fell by 41,700 in September, outstripping expectations for a decline of 25,000 people.
The rate of unemployment in the U.K. was steady at 7.7% in August, in line with expectations.
In the week ahead, U.S. data releases will be in focus after the shutdown delayed the release of some key economic reports. The Department of Labor is to publish the September nonfarm payrolls report on Tuesday and data on durable goods orders is to be released on Friday.
Meanwhile, the U.K. is to release preliminary data on third quarter growth, while the Bank of England is to publish the minutes of its latest policy meeting.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 21
The U.S. is to release private sector data on existing home sales, a leading indicator of demand in the housing sector.
Tuesday, October 22
The U.K. is to release data on public sector net borrowing.
The U.S. is to publish the September nonfarm payrolls report, which had been originally scheduled for release on October 4.
Wednesday, October 23
The BoE is to release the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.
Thursday, October 24
The U.K. is to publish private sector data on industrial order expectations. Later in the day, BoE Governor Mark Carney is to speak; his comments will be closely watched.
The U.S. is to release the weekly report on initial jobless claims, as well as data on new home sales.
Friday, October 25
The U.K. is to publish preliminary data on third quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth.
The U.S. is to round up the week with data on durable goods orders, a leading indicator of production, as well as revised data on consumer sentiment from the University of Michigan.