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Forex - GBP/USD weekly outlook: August 11 - 15

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Investing.com -

Investing.com - The pound slumped to two month lows against the dollar on Friday after U.K. trade data showed that exports fell in June and as escalating geopolitical tensions bolstered safe haven demand.

GBP/USD was down 0.35% to 1.6772 late Friday, the lowest level since June 11. For the week, the pair lost 0.31%.

Cable was likely to find support at the 1.6700 level and resistance at around 1.6860.

Sterling moved lower after official data showed that U.K. exports fell by 1.9% in June, largely due to weak demand in the euro zone, while imports fell by 0.3%.

As a result, the U.K. trade deficit widened to £9.4 billion from £9.2 billion in June, against forecasts that it would narrow to £8.8 billion.

The poor trade data overshadowed another report showing that U.K. construction output was up 1.2% in June, erasing a loss of the same amount in May, and climbed 5.3% on a year-over-year basis.

The pound fell to six week lows against the euro, with EUR/GBP rising 0.70% to 0.7996 late Friday.

Concerns over rising geopolitical tensions continued to dominate market sentiment after the U.S. launched airstrikes in Iraq, in a bit to halt the advance of extremists in the country's north. A breakdown in the ceasefire between Israel and Gaza also fuelled widespread risk aversion.

However, fears over hostilities between Russia and Ukraine eased on Friday after Russia's defense ministry said it had concluded military exercises it was holding close to the border with Ukraine.

In the week ahead, investors will be continuing to monitor geopolitical risk. Markets watchers will also be looking ahead to Wednesday's inflation report from the Bank of England and the U.S. report on retail sales the same day.

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, August 12

The U.K. is to release private sector data on retail sales.

Wednesday, August 13

The U.K. is to publish data on the change in the number of people employed and the unemployment rate, as well as data on average earnings. Later in the day, the Bank of England is to publish its quarterly inflation report and Governor Mark Carney is to speak.

The U.S. is to publish data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.

Thursday, August 14

The U.S. is to release the weekly report on initial jobless claims.

Friday, August 15

The U.K. is to release revised data on second quarter economic growth.

The U.S. is to round up the week with reports on manufacturing activity in New York state and industrial output, as well as preliminary data on consumer sentiment.

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


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

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