Investing.com - The pound ended the week at more than three-year
highs against the dollar on Friday, after the Bank of England
revised up its forecast for growth this year and indicated that it
may raise interest rates next year.
GBP/USD ended Friday's session up 0.55% at 1.6748, the highest
since November 2009. For the week, the pair jumped 2.10%.
Cable is likely to find support at 1.6643, Friday's low and
resistance at 1.6875.
Sterling continued to extend broad gains after the BoE raised
its U.K. economic growth forecast for 2014 to 3.4% from 2.8% on
The bank also updated its forward guidance on bank rates, saying
it will not raise rates until the spare capacity in the U.K.
economy has been fully absorbed, which it sees happening in
The dollar came under pressure after data on Friday showed that
U.S. factory output fell unexpectedly in January, clouding the
outlook for the economic recovery.
U.S. industrial production fell 0.3% from a month earlier in
January, compared to expectations for a 0.3% gain.
The unexpectedly weak data fuelled concerns that inclement
winter weather is acting as a drag on growth.
A separate report showed that the preliminary reading of the
University of Michigan's consumer sentiment index for February came
in at 81.2, unchanged from the final reading in January. Analysts
had expected the index to tick down to 80.6.
The mixed data did little to alter expectations that the Federal
Reserve will continue to scale back its stimulus program.
In her first Congressional testimony since her appointment as
Fed Chair, Janet Yellen said Wednesday that the central bank would
continue to gradually reduce the pace of its asset purchase
She also reiterated that the Fed plans to hold interest rates at
zero "well past" the time the jobless rate falls below 6.5%.
In the week ahead, U.K. data on employment and inflation will be
closely watched. The U.S. is also to publish data on inflation, as
well as reports on the housing sector and manufacturing
Ahead of the coming week, Investing.com has compiled a list of
these and other significant events likely to affect the
Monday, February 17
Markets in the U.S. are to remain closed for the Presidents Day
Tuesday, February 18
The U.K. is to release data on consumer price inflation, which
accounts for the majority of overall inflation.
The U.S. is to release data on manufacturing activity in the
Wednesday, February 19
The U.K. is to release official data on the change in the number
of people unemployed and the unemployment rate, as well as data on
average earnings and public sector borrowing. Meanwhile, the BoE is
to publish the minutes of its most recent policy setting
The U.S. is to publish reports on building permits, housing
starts and producer price inflation.
Meanwhile, the Federal Reserve is to publish the minutes of its
most recent policy setting meeting.
Thursday, February 20
The U.K. is to produce private sector data on industrial
The U.S. is to release the weekly report on initial jobless
claims and data on consumer price inflation. The nation is also to
release data on manufacturing activity in the Philadelphia
Friday, February 21
The U.K. is to produce official data on retail sales, the
government measure of consumer spending, which accounts for the
majority of overall economic activity, as well as data on public
sector net borrowing.
The U.S. is to round up the week with private sector data on
existing homes sales.
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