Forex - GBP/USD weekly outlook: February 17 - 21

A A A - - 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 Wednesday.

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 2015.

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 program.

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 activity.

Ahead of the coming week, has compiled a list of these and other significant events likely to affect the markets.

Monday, February 17

Markets in the U.S. are to remain closed for the Presidents Day holiday.

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 Empire State.

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 meeting.

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 orders.

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 region.

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. offers an extensive set of professional tools for the financial markets.
Read more News on and download the new Stocks & Forex App for Android!

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Forex and Currencies

Referenced Stocks:

More from

Related Videos



Most Active by Volume

  • $16.44 ▲ 2.37%
  • $10.19 ▲ 28.66%
  • $112.92 ▲ 2.94%
  • $25.01 ▲ 4.16%
  • $105.64 ▲ 2.53%
  • $2.28 ▲ 49.02%
  • $27.99 ▼ 2.34%
  • $43.90 ▲ 2.79%
As of 8/27/2015, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by