Forex Pros - The pound advanced to a more than two-week high against the broadly weaker U.S. dollar on Friday, as the outlook for the U.S. economic recovery became increasingly uncertain.
GBP/USD hit 1.6056 on Tuesday, the pair's lowest since April 1; the pair subsequently consolidated at 1.6504 by close of trade on Friday, surging 1.7% over the week.
Cable is likely to find support at 1.6266, Thursday's low and resistance at 1.6660, the high of March 3.
On Friday, the National Association of Realtors' said pending home sales index fell 11.6% in April, much worse that the 1.0% decline forecast. A separate report showed that U.S. customer spending rose just 0.4% last month, less than the expected 0.5% gain.
On Thursday, revised data showed that U.S. gross domestic product grew more slowly than forecast in the first quarter, rising at 1.8% annual rate, disappointing expectations for a 2.1% increase.
The disappointing data only served to reiterate the view that the Federal Reserve is likely to keep monetary policy loose for some time to come.
Meanwhile, hopes for a near-term rate hike by the Bank of England were trimmed back on Wednesday, after official data confirmed that the U.K. economy grew just 0.5% in the first quarter after contracting by the amount in the last three months of 2010.
The report said household spending contracted by 0.6% on the quarter, its biggest drop since the second quarter of 2009, when the economy was still in recession.
In the week ahead, markets are to remain closed on Monday for holidays in the U.S. and the U.K., while investors will be looking towards Friday's data on non-farm payrolls to gauge the strength of the U.S. economic recovery.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday, May 30
Markets in the U.S. are to remain closed for Memorial Day, while markets in the U.K. are to remain closed for the Spring Bank Holiday.
Tuesday, May 31
The U.S. is to publish industry data on house price inflation and consumer confidence, as well as an index of manufacturing activity in the Chicago area.
Wednesday, June 1
In the U.K., the Bank of England is to publish official data on net lending to individuals as well as reports on mortgage approvals and M4 money supply. The government is also to publish data on manufacturing activity.
Later Wednesday, U.S. payroll processing firm ADP is to publish its report on non-farm payrolls, which leads government data by two days. Meanwhile, the Institute of Supply Management is to publish data on manufacturing activity.
Thursday, June 2
The U.K. is to publish official data on construction sector growth, an important indicator of economic health.
Also Thursday, the U.S. is to publish its weekly report on initial jobless claims, as well as revised data on non-farm productivity and labor costs. The country is also to publish official data on factory orders, a leading indicator of production, and a government report on crude oil stockpiles.
Friday, June 3
The U.K. is to publish a report on service sector growth, a leading indicator of economic health.
Meanwhile, the U.S. is to round up the week with a flurry of data, including a government report on non-farm employment change, a big market mover. The U.S. is also to release official data on the overall unemployment rate and average hourly earnings, while the Institute of Supply Management is to publish its index of service sector growth.
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