Investing.com - The pound turned lower against the dollar on Friday, backing off one-month highs as the greenback rebounded from a sharp selloff in the wake of the Federal Reserve’s decision to keep interest rates on hold on Thursday.
GBP/USD was down 0.4% to 1.5528 late Friday, after rising as high as 1.5657 earlier, the most since August 26.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.78% to 95.36 late Friday after falling as low as 94.19 in early trade. The index ended the week 0.2% lower.
The greenback sold off sharply after the Fed left short-term interest rates unchanged on Thursday, amid concerns over sluggish domestic inflation and the effects of recent market volatility on the U.S. economy.
The Fed said it wanted to see "some further improvement in the labor market," and be "reasonably confident" that inflation will increase before hiking rates.
While the decision was not completely unexpected the Fed’s concerns over the uncertain outlook for global growth rattled financial markets and pressured the dollar lower.
In the U.K., Bank of England Chief Economist Andy Haldane reiterated his opposition to a near-term interest rate hike on Friday and said policy could just as easily be loosened as tightened to support the U.K. recovery and return inflation to target.
In the week ahead, investors will be turning their attention to Wednesday’s index of manufacturing activity from China and surveys on private sector activity from the euro zone for a fresh indication on the strength of the global economy.
Market participants will also be closely watching a speech by Fed chair Janet Yellen on Thursday.
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 Wednesday as there are no relevant events on this day.
Monday, September 21
The U.S. is to release a report on existing home sales.
Tuesday, September 22
The U.K. is to produce data on public sector borrowing.
Thursday, September 24
The U.S. is to release data on durable goods orders, initial jobless claims and new home sales.
Fed Chair Janet Yellen is to speak at an event at the University of Massachusetts.
Friday, September 25
The U.S. is to round up the week with revised data on second quarter economic growth and a revised report on consumer sentiment.