Forex Pros - The pound closed lower against the U.S. dollar last week as concerns over Greece's sovereign debt crisis and expectations that U.K. interest rates will remain on hold as the economy struggles to recover weighed.
GBP/USD hit 1.6077 on Thursday, the pair's lowest since May 24; the pair subsequently consolidated at 1.6191 by close of trade on Friday, shedding 0.24% over the week.
Cable is likely to find support at 1.6056, the low of May 24 and a two-month low and resistance at 1.6382, Wednesday's high.
The pound trimmed losses on Friday amid hopes for a solution on an aid package for Greece, after German Chancellor Angela Merkel dropped demands that bondholders should share the burden of a new bailout package.
But risk aversion remained elevated after ratings agency Moody's said it was putting Italy's sovereign rating under review, pending a possible downgrade.
On Thursday, the pound fell sharply against the dollar after official data showed that retail sales in the U.K. fell more than twice as fast as expected in May, due in large part to the biggest monthly decline in food store sales since June 2008.
The Office for National Statistics said retail sales volumes, including automotive fuel, fell 1.4% last month, more than reversing April's 1.1% gain and well below forecasts for a fall of 0.5%. It was the biggest fall since January 2010.
The data reinforced expectations that the Bank of England will keep interest rates on hold for the rest of this year.
Earlier in the week, official data showed that the number of people in the U.K. claiming unemployment benefits rose at the fastest pace in almost two years in May, while a separate report showed that average earnings rose less-than-expected in May.
In the week ahead, the Federal Reserve is to hold its policy setting meeting, which will be followed by a closely watched press conference by Fed Chairman Ben Bernanke. Investors are hoping that Bernanke will shed some light on the banks view of the need for further monetary easing.
Meanwhile, the BoE is to publish the minutes of its most recent policy setting meeting while the bank's governor and several policymakers are to testify on inflation before Parliament.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday, June 20
The U.K. is to publish a report on house price inflation, a leading indicator of the housing industry's health.
Tuesday, June 21
The U.K. is to publish official data on public borrowing as well as a report on industrial order expectations, a leading indicator of economic health.
Wednesday, June 22
In the U.K., the BoE is to publish the minutes of its most recent policy setting meeting, which give an important insight into the economic conditions that influenced the decision on where to set interest rates.
Later Wednesday, the Federal Reserve is to announce its federal funds rate. The announcement will be followed with a press conference by Fed Chairman Ben Bernanke to discuss the bank's rate statement.
Thursday, June 23
The U.K. is to publish industry data on mortgage approvals, a leading indicator of housing market demand. The country is also to publish industry data on retail sales, a leading indicator of consumer spending.
Also Thursday, BoE Governor Mervyn King and several members of the bank's monetary policy committee are to testify on inflation and the economic outlook before Parliament's Treasury Committee.
Later in the day, the U.S. is to publish government data on initial jobless claims, as well as official data on new home sales, both leading indicators of economic health.
Friday, June 24
In the U.K., BoE Governor Mervyn King is to hold a press conference about the bank's Financial Stability Report in London; his comments will be closely watched.
The U.S. is to round up the week with official data on durable goods orders, a leading indicator of production, as well revised data on first quarter gross domestic product, the broadest measure of economic activity and the primary gauge of the economy's health.