Investing.com - The pound rose to two-week highs against the dollar on Friday after U.S. jobs data for August missed forecasts, dampening expectations that the Federal Reserve will start to phase out stimulus as soon as this month.
GBP/USD rose to highs of 1.5681, the highest since August 21, before paring gains to settle at 1.5627, 0.26% higher for the day and 0.55% higher for the week.
Cable is likely to find support at 1.5553, the low of September 4 and resistance at 1.5700.
The Department of Labor said the U.S. economy added 169,000 jobs in August, fewer than the 180,000 forecast by economists.
The unemployment rate ticked down to a four-and-a-half year low of 7.3% from 7.4% in July, but this was partially due to more people dropping out of the labor force.
The report also said that job growth in July was revised down to 104,000 from 162,000, while June’s figure was revised down to 172,000 from 188,000.
The disappointing data curbed expectations that the Fed will start to unwind its USD85 billion-a-month asset purchase program at its upcoming policy meeting on September 17-18.
Fed Chairman Ben Bernanke has said that the decision to begin tapering will depend on whether economic data is strong enough.
In the U.K., data on Friday showed that the trade deficit widened to a larger-than-expected GBP3.08 billion in July, raising concerns over the outlook for the economic recovery.
A separate report showed that U.K. industrial production was unexpectedly flat in July, while manufacturing production grew less than expected.
Earlier in the week data showed that that activity in the U.K. services sector expanded at the fastest rate in six-and-a-half years in August. The report boosted expectations that that Bank of England may raise interest rates sooner than it has indicated.
Last month BoE Governor Mark Carney said the bank will not consider raising interest rates until the unemployment rate falls below 7%, something the bank doesn't see until 2016.
The BoE left interest rates on hold at 0.5% on Thursday in a widely expected decision and announced no change to the bank’s asset purchase program.
In the week ahead, the dollar looks likely to remain under pressure ahead of the outcome of the Fed’s upcoming policy meeting later in the month. Investors will be looking ahead to Friday’s U.S. data on retail sales and consumer sentiment for indications on the strength of the economic recovery.
In the U.K., testimony by BoE policymakers on Tuesday and Wednesday’s jobs report will be closely watched.
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 Monday, as there are no relevant events on this day.
Tuesday, September 10
In the U.K., BoE Governor Mark Carney and monetary policy committee members are to testify on the inflation and economic outlook before the Treasury Select Committee.
Wednesday, September 11
The U.K. is to release government data on the change in the number of people unemployed, the overall unemployment rate and average earnings.
Thursday, September 12
The U.S. is to release the weekly government report on initial jobless claims, a leading economic indicator, as well as official data on import prices.
Friday, September 13
The U.S. is to round up the week with reports on retail sales and producer price inflation, as well as preliminary data from the University of Michigan on consumer sentiment.
GBP/USD rose to highs of 1.5681, the highest since August 21, before paring gains to settle at 1.5627, 0.26% higher for the day and 0.55% higher for the week.
Cable is likely to find support at 1.5553, the low of September 4 and resistance at 1.5700.
The Department of Labor said the U.S. economy added 169,000 jobs in August, fewer than the 180,000 forecast by economists.
The unemployment rate ticked down to a four-and-a-half year low of 7.3% from 7.4% in July, but this was partially due to more people dropping out of the labor force.
The report also said that job growth in July was revised down to 104,000 from 162,000, while June’s figure was revised down to 172,000 from 188,000.
The disappointing data curbed expectations that the Fed will start to unwind its USD85 billion-a-month asset purchase program at its upcoming policy meeting on September 17-18.
Fed Chairman Ben Bernanke has said that the decision to begin tapering will depend on whether economic data is strong enough.
In the U.K., data on Friday showed that the trade deficit widened to a larger-than-expected GBP3.08 billion in July, raising concerns over the outlook for the economic recovery.
A separate report showed that U.K. industrial production was unexpectedly flat in July, while manufacturing production grew less than expected.
Earlier in the week data showed that that activity in the U.K. services sector expanded at the fastest rate in six-and-a-half years in August. The report boosted expectations that that Bank of England may raise interest rates sooner than it has indicated.
Last month BoE Governor Mark Carney said the bank will not consider raising interest rates until the unemployment rate falls below 7%, something the bank doesn't see until 2016.
The BoE left interest rates on hold at 0.5% on Thursday in a widely expected decision and announced no change to the bank’s asset purchase program.
In the week ahead, the dollar looks likely to remain under pressure ahead of the outcome of the Fed’s upcoming policy meeting later in the month. Investors will be looking ahead to Friday’s U.S. data on retail sales and consumer sentiment for indications on the strength of the economic recovery.
In the U.K., testimony by BoE policymakers on Tuesday and Wednesday’s jobs report will be closely watched.
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 Monday, as there are no relevant events on this day.
Tuesday, September 10
In the U.K., BoE Governor Mark Carney and monetary policy committee members are to testify on the inflation and economic outlook before the Treasury Select Committee.
Wednesday, September 11
The U.K. is to release government data on the change in the number of people unemployed, the overall unemployment rate and average earnings.
Thursday, September 12
The U.S. is to release the weekly government report on initial jobless claims, a leading economic indicator, as well as official data on import prices.
Friday, September 13
The U.S. is to round up the week with reports on retail sales and producer price inflation, as well as preliminary data from the University of Michigan on consumer sentiment.