Investing.com - " The pound fell to two-week lows against the
broadly stronger dollar on Friday after unexpectedly strong U.S.
manufacturing data reinforced expectations that the Federal Reserve
will start to phase out its easy money policies sooner than
GBP/USD ended Friday's session at 1.5923, down 0.68% for the day.
The pair ended the week with losses of 1.32%.
The pair is likely to find support at 1.5775, the low of September
13 and resistance at 1.6045, Friday's high.
The dollar gained ground after the Institute of Supply Management
said its manufacturing purchasing managers' index rose to 56.4 in
October, the highest since April 2011, from 56.2 in September.
Economists had expected the index to tick down to 55.0.
The Fed left its USD85 billion-a-month asset purchase program in
place following its monthly meeting on Wednesday and was less
pessimistic than expected in its assessment of the economy. Fed
officials said the economy is expanding "at a moderate pace" and
said downside risks were diminishing.
The bank gave no clear indication whether it would start scaling
back stimulus at the December meeting or continue it into the start
Earlier Friday, data showed that manufacturing activity in the U.K.
edged down slightly more than expected in October.
The U.K. manufacturing purchasing managers' index ticked down to 56
from 56.3 in September, only moderately below August's two-year
highs of 57.1. Analysts had forecast a reading of 56.1.
The report said total new orders rose at a rate close to August's
19-year peak, as new export business rose at the fastest pace since
Elsewhere, sterling ended the week sharply higher against the euro,
with EUR/GBP losing 0.83% to settle at 0.8472.
The single currency weakened across the board after data on
Thursday showing that euro zone inflation fell to a four year low
in October raised concerns that the European Central Bank may ease
monetary policy as soon as this week to help shore up growth.
Eurostat said consumer price inflation in the currency bloc slowed
to 0.7% in October, the slowest pace since November 2009, from 1.1%
A separate report showed that the euro zone unemployment rate rose
to a record high 12.2% in September.
On Friday the U.S. is to release the nonfarm payrolls report for
October, which will help assess expectations for a possible
reduction in Fed stimulus.
Data released on Wednesday showed that the U.S. private sector
added fewer jobs than expected in October. Payroll processing firm
ADP said non-farm private employment rose by a seasonally adjusted
130,000 in October, below expectations for an increase of 150,000.
The U.S. is also to release preliminary data on third quarter
economic growth, while the Bank of England is to announce its
benchmark interest rate.
Ahead of the coming week, Investing.com has compiled a list of
these and other significant events likely to affect the markets.
Monday, November 4
The U.K. is to publish data on construction sector activity, a
leading economic indicator.
The U.S. is to release data on factory orders, a leading indicator
Tuesday, November 5
The U.K. is to release private sector data on retail sales, an
important economic indicator. The U.K. is also to publish data on
service sector activity, a leading economic indicator.
In the U.S., the ISM is to release a report on service sector
Wednesday, November 6
The U.K. is to produce a report on manufacturing and industrial
Thursday, November 7
The Bank of England is to announce its benchmark interest rate.
The U.S. is to publish a preliminary estimate of third quarter
gross domestic product, the broadest indicator of economic activity
and the leading indicator of economic growth. Meanwhile, the Labor
Department is to release its weekly report on initial jobless
Friday, November 8
The U.K. is to release data on the trade balance.
The University of Michigan is to release the preliminary reading of
its consumer sentiment index. The U.S. is to round up the week with
the closely watched government data on nonfarm payrolls and the
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