Investing.com - The pound ended the week lower against the broadly stronger dollar on Friday as mounting expectations that the Federal Reserve will soon unwind its bond-buying program underpinned dollar demand.
GBP/USD hit 1.5367 on Friday; the pair’s lowest since June 5, before trimming losses at settle at 1.5416, down 0.55% for the day and 1.97% lower for the week.
Cable is likely to find support at 1.5290, the low of June 5 and resistance at 1.5528, Friday’s high.
The dollar strengthened against the other major currencies on Wednesday after Fed Chairman Ben Bernanke said the bank could begin tapering its USD85 billion-a-month asset purchase program by the end of 2013 and wind it down completely by the middle of 2014 if the economy picks up as the central bank expects.
The bank said it expects the U.S. economy to grow between 2.3% and 2.6% in 2013. The Fed also said it expects the unemployment rate to fall to between 6.5% and 6.8% by the end of 2014 and inflation to edge closer to its 2% target.
In the U.K., Wednesday’s minutes of the Bank of England’s June meeting showed that three policymakers, including outgoing Governor Mervyn King voted in favor of additional easing, unchanged from the previous month.
The BoE said recent economic data has been largely positive and was consistent with the slow but sustained recovery outlined in the bank’s quarterly forecasts in May.
Data on Thursday showed that that U.K. retail sales rose 2.1% in May, outstripping expectations for a 0.8% gain, and were 1.9% higher on a year-over-year basis. The robust data added to the view that the economic recovery in the U.K. is gaining traction in the second quarter.
In the week ahead, investors will be closely watching U.S. data on durable goods orders, jobless claims and consumer confidence for signs that the economic recovery is on track.
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, June 25
The U.K. is to publish industry data on mortgage approvals, a leading indicator of demand in the housing sector. Meanwhile, BoE policymakers are to testify on inflation and the economic outlook before the parliamentary treasury committee.
The U.S. is to publish official data on durable goods orders, a leading indicator of production, as well as closely watched reports on consumer confidence and new home sales.
Wednesday, June 26
The BoE is to release its financial stability report, while the U.K. is to release private sector data on retail sales.
Later Wednesday, the U.S. is to release revised data on first quarter economic growth as well as government data on crude oil stockpiles.
Thursday, June 27
The U.K. is to publish official data on the current account and revised data on first quarter economic growth.
The U.S. is to release the weekly government report on initial jobless claims along with data on personal income and expenditure, which is to be followed by private sector data on pending home sales.
Friday, June 28
The U.S. is to round up the week with a report on manufacturing activity in Chicago and revised data from the University of Michigan on consumer sentiment.