Shutterstock photo
Markets

Forex - GBP/USD weekly outlook: January 6 - 10

Shutterstock photo

Shutterstock photo

Investing.com - The pound slid lower against the broadly stronger dollar on Friday, extending declines into a second session, following optimistic comments from outgoing Federal Reserve Chairman Ben Bernanke on the U.S. economic outlook.

GBP/USD hit lows of 1.6396 and was last down 0.21% to 1.6419, to end the week with losses of 0.45%.

Cable is likely to find support at 1.6369, the low of December 26 and resistance at 1.6531.

The dollar was boosted after Bernanke said the U.S. economy should continue to improve in 2014, but reiterated that monetary policy will remain "highly accommodative" for as long as needed.

"The combination of financial healing, greater balance in the housing market, less fiscal restraint, and, of course, continued monetary policy accommodation bodes well for U.S. economic growth in coming quarters," Bernanke said. "Despite this progress, the recovery clearly remains incomplete".

The comments came after the Fed's December decision to roll back its asset purchase program to USD75 billion a month from USD85 billion a month starting this month.

In the U.K., data on Friday showed that activity in the construction sector edged slightly lower in December, pulling back from November's six-year high. The construction purchasing managers index fell to 62.1 from 62.6 a month earlier. Analysts had expected the index to tick down to 62.0.

In a separate report, the Bank of England said that U.K. mortgage approvals rose to 70,758 in November from 68,029 a month earlier. It was the highest level in nearly six years.

Sterling was higher against the euro at the close, with EUR/GBP falling 0.42% to session lows of 0.8276. For the week, the pair fell 1.15%.

In the week ahead, the Fed is to publish the minutes of its December meeting on Wednesday, while the U.S. jobs report for December is scheduled to be released on Friday. Meanwhile, Thursday's interest rate decision by the Bank of England will also be in focus.

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

Monday, January 6

The U.K. is to produce data on service sector activity, a leading indicator of economic health.

The U.S. is to publish data on factory orders, while the Institute of Supply Management is to release data on service sector activity.

Tuesday, January 7

The U.S. is to publish data on the trade balance, the difference in value between imports and exports.

Wednesday, January 8

The U.S. is to release the ADP report on private sector job creation, which leads the government's nonfarm payrolls report by two days.

Later Wednesday, the Federal Reserve is to publish what will be the closely watched minutes of its latest policy meeting.

Thursday, January 9

The U.K. is to release data on the trade balance. Meanwhile, the BoE is to announce its benchmark interest rate.

In the U.S., the Labor Department is to release its weekly report on initial jobless claims.

Friday, January 10

The U.K. is to release a report on industrial and manufacturing production, a leading indicator of economic health.

The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.

Investing.com offers an extensive set of professional tools for the financial markets.

Read more News on Investing.com and download the new Investing.com Stocks & Finance App for Android!

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.

Other Topics

ForEx