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Forex - GBP/USD weekly outlook: September 22 - 26

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Investing.com -

Investing.com - The pound turned lower against the broadly stronger dollar on Friday, coming off the two-week highs hit earlier in the session after voters in Scotland's independence referendum elected to remain inside the United Kingdom.

GBP/USD was down 0.68% to 1.6284 in late trade, reversing a rally which propelled it to two-week highs of 1.6523.

Sterling also trimmed gains against the euro, with EUR/GBP at 0.7878 in late trade, off the two year lows of 0.7809 struck earlier in the session.

The pound was initially boosted after voters in Scotland chose to stay in the U.K. by a significant margin in a independence referendum, defying opinion polls which had indicated that the final result would be too close to call.

A total of 55% of voters voted to reject independence, while 45% voted in favor of it.

Sterling slumped to 10-month lows against the dollar earlier this month as uncertainty over the Scottish referendum rattled financial markets.

With the referendum issue out of the way, investors began to turn their attention back towards the Bank of England's monetary policy stance.

Sterling rallied in the early part of the year on the back of expectations that the deepening recovery in the U.K. would prompt the BoE to raise interest rates ahead of other central banks.

However, the dollar has rallied in the past two months as economic data indicated that the U.S. recovery is progressing strongly, while the pace of the recovery in the U.K. appeared to be moderating.

On Wednesday the Federal Reserve offered fresh guidance on its plans to raise interest rates, outlining in more detail how it will start to raise short term interest rates when the time comes.

The Fed statement reiterated that it expects rates to remain on hold for a \"considerable time\", after its bond purchasing program ends, but it outlined in more detail how it will start to raise short term interest rates when the time comes.

The Fed also cut its monthly asset purchase program by another $10 billion, keeping the program on track to finish next month.

The week will bring a fresh look at the U.S. housing sector, with reports on both new and existing home sales, as well as Thursday's data on durable goods orders and initial jobless claims. The calendar in the U.K. is light, with reports on mortgage approvals and public borrowing due on Tuesday.

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

Monday, September 22

The U.S. is to release private sector data on existing home sales.

Tuesday, September 23

The U.K. is to release private sector data on mortgage approvals, as well as a report on public sector borrowing.

Wednesday, September 24

The U.S. is to publish data on new home sales.

Thursday, September 25

The U.S. is to release reports on durable goods orders and initial jobless claims.

Friday, September 26

The U.S. is to round up the week with revised data on gross domestic product, the broadest indicator of economic activity and the leading measure of the economy's health. The U.S. is also to release revised 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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