Investing.com – Last week the pound pulled back from an almost 17-month high against the broadly stronger U.S. dollar, after a flurry of weak U.K. data dampened expectations for a rate hike by the Bank of England in the coming months.
GBP/USD hit 1.6738 on Monday, the weekly high and an almost 17-month high; the pair subsequently consolidated at 1.6366 by close of trade on Friday, tumbling 2.06% over the week.
Cable is likely to find support at 1.6229, the low of April 19 and resistance at 1.6573, last Wednesday’s high.
On Thursday, the BoE left interest rates on hold at 0.5% after data on the UK's dominant services sector came in weaker-than-expected.
The Markit/CIPS services purchasing managers’ index fell to 54.3 in April from 57.1 in March. While still indicating growth, it was below forecasts of 55.7.
Chris Williamson, Markit's chief economist said the survey indicated "the largest loss of growth momentum seen since just after the collapse of Lehmans" in September 2008.
He added that the PMI data signaled that Britain’s gross domestic product was expanding at a quarterly rate of just 0.4%.
The data which came after a series of soft data releases on housing, services and construction added to evidence of a fragile U.K. economic recovery with markets now not fully pricing in a BoE rate hike until December at the earliest.
Meanwhile, the greenback was bolstered on Friday after official data showed that U.S. nonfarm payrolls rose by 244,000 in April, as the private sector posted the strongest employment gain in five years. Economists had forecast that payrolls would rise by 185,000.
In the week ahead, investors will be looking towards U.S. data on retail sales and inflation to gauge the strength of the U.S. economic recovery while the BoE is to publish its quarterly inflation report.
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, May 10
The U.K. is to publish industry reports on retail sales and house prices, important indicators of economic health.
Meanwhile, the U.S. is to release official data on import prices, an important inflationary indicator as well as data on economic optimism and wholesale inventories.
Wednesday, May 11
The U.K. is to publish official data on its trade balance, the difference in value between imported and exported goods and services. Meanwhile, BoE Governor Mervyn King is to hold a press conference to discuss the banks inflation report, which contains the central banks projection for inflation and economic growth over the next two years.
Later in the day, the U.S. is to publish official data on its trade balance as well as government data on crude oil inventories and the federal budget balance.
Thursday, May 12
The U.S. is to publish a weekly report on initial jobless claims as well as official data on producer price inflation, a leading indicator of consumer inflation. The country is also to publish government data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity.
Later in the day, Federal Reserve Chairman Ben Bernanke is to testify before the Senate Banking Committee in Washington.
In the U.K., the National Institute of Economic and Social Research is to publish its monthly estimate of GDP, in an effort to predict the quarterly government data. The U.K. is also to publish government data on manufacturing production, a leading indicator of economic health.
Friday, May 13
The U.S. is to round up the week with official data on consumer price inflation while the University of Michigan is to publish preliminary data on consumer sentiment and inflation expectations.
GBP/USD hit 1.6738 on Monday, the weekly high and an almost 17-month high; the pair subsequently consolidated at 1.6366 by close of trade on Friday, tumbling 2.06% over the week.
Cable is likely to find support at 1.6229, the low of April 19 and resistance at 1.6573, last Wednesday’s high.
On Thursday, the BoE left interest rates on hold at 0.5% after data on the UK's dominant services sector came in weaker-than-expected.
The Markit/CIPS services purchasing managers’ index fell to 54.3 in April from 57.1 in March. While still indicating growth, it was below forecasts of 55.7.
Chris Williamson, Markit's chief economist said the survey indicated "the largest loss of growth momentum seen since just after the collapse of Lehmans" in September 2008.
He added that the PMI data signaled that Britain’s gross domestic product was expanding at a quarterly rate of just 0.4%.
The data which came after a series of soft data releases on housing, services and construction added to evidence of a fragile U.K. economic recovery with markets now not fully pricing in a BoE rate hike until December at the earliest.
Meanwhile, the greenback was bolstered on Friday after official data showed that U.S. nonfarm payrolls rose by 244,000 in April, as the private sector posted the strongest employment gain in five years. Economists had forecast that payrolls would rise by 185,000.
In the week ahead, investors will be looking towards U.S. data on retail sales and inflation to gauge the strength of the U.S. economic recovery while the BoE is to publish its quarterly inflation report.
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, May 10
The U.K. is to publish industry reports on retail sales and house prices, important indicators of economic health.
Meanwhile, the U.S. is to release official data on import prices, an important inflationary indicator as well as data on economic optimism and wholesale inventories.
Wednesday, May 11
The U.K. is to publish official data on its trade balance, the difference in value between imported and exported goods and services. Meanwhile, BoE Governor Mervyn King is to hold a press conference to discuss the banks inflation report, which contains the central banks projection for inflation and economic growth over the next two years.
Later in the day, the U.S. is to publish official data on its trade balance as well as government data on crude oil inventories and the federal budget balance.
Thursday, May 12
The U.S. is to publish a weekly report on initial jobless claims as well as official data on producer price inflation, a leading indicator of consumer inflation. The country is also to publish government data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity.
Later in the day, Federal Reserve Chairman Ben Bernanke is to testify before the Senate Banking Committee in Washington.
In the U.K., the National Institute of Economic and Social Research is to publish its monthly estimate of GDP, in an effort to predict the quarterly government data. The U.K. is also to publish government data on manufacturing production, a leading indicator of economic health.
Friday, May 13
The U.S. is to round up the week with official data on consumer price inflation while the University of Michigan is to publish preliminary data on consumer sentiment and inflation expectations.