Forex - GBP/USD weekly outlook: Oct 28 - Nov 1

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Investing.com - " The pound posted a second week of gains against the dollar on Friday after data showed that the U.K. economy grew at the fastest pace in three years in the third quarter, but gains were limited as sterling lost momentum following a rally in the last three months.

GBP/USD ended Friday's session at 1.6166, 0.21% lower for the day, after briefly touching session highs of 1.6247. For the week, the pair gained 0.22%.

Cable is likely to find support at 1.6100 and resistance at 1.6255, the high of October 23 and an almost nine-month high.

Sterling touched session highs after the Office of National Statistics said the U.K. economy expanded by 0.8% in the three months to September, in line with forecasts and grew 1.5% on a year-over-year basis.

But the pound came off session highs amid concerns that markets have been premature in pricing in possible rate hikes by the Bank of England.

In August the BoE said it will not consider lifting rates from their current 0.5% low until the U.K. unemployment rate has dropped to 7%, which it estimates could take three years.

Wednesday's minutes of the BoE's October meeting said the U.K. unemployment rate appears to be falling at a faster than expected rate as the "robust" recovery gains traction.

In the U.S. data on Friday showed that core durable goods orders unexpectedly fell 0.1% in September, the third consecutively decline. A separate report showed that the University of Michigan U.S. consumer sentiment index was revised down to a 10 month low in October.

The data cemented expectations that the Federal Reserve will maintain the current pace of its asset purchase program into early next year.

The Fed surprised investors when it unexpectedly refrained from scaling back asset purchases at its policy setting meeting in September, saying it wanted more evidence of an economic recovery.

In the week ahead, investors will be focused on the outcome of Wednesday's Federal Reserve policy setting meeting. The central bank is expected to keep its USD85 billion-a-month asset purchase program on track. Thursday's U.K. manufacturing data will also 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.

Monday, October 28

The U.K. is to release private sector data on retail sales, an important economic indicator.

The U.S. is to produce reports on industrial production and the capacity utilization rate, as well as private sector data on pending home sales.

Tuesday, October 29

The U.K. is to publish data on net lending to individuals.

The U.S. is to produce data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to publish data on producer price inflation and a report on consumer confidence, a leading economic indicator.

Wednesday, October 30

The U.S. is to release the ADP report on nonfarm payrolls and official data on consumer price inflation.

Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement. The statement is to be followed by a closely watched press conference with Chairman Ben Bernanke.

Thursday, October 31

The U.S. is to release data on initial jobless claims and a report on manufacturing activity in the Chicago region.

Friday, November 1

The U.K. is to publish data on manufacturing activity, a leading economic indicator.

The U.S. is to round up the week with a report from the Institute of Supply Management on manufacturing activity.




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