Investing.com - The pound moved higher against the dollar on Friday and hit fresh seven year highs against the euro at the end of a volatile week of trading.
EUR/GBP was down 0.30% to 0.7247 in late trade, while GBP/USD advanced 0.21% to 1.5437, still below the previous session highs of 1.5551.
Sterling’s gains against the dollar were held in check after data showing that the U.S. economy expanded modestly in the last quarter of 2014, supporting expectations for interest rate increases.
The Commerce Department reported that U.S. gross domestic product grew at an annual rate of 2.2% in the last three months of 2014, down from an initial estimate of 2.6% but ahead of expectations for a downward revision to 2.1% growth.
Other reports showed that U.S. pending home sales rose to a one-and-a-half year high in January and consumer sentiment also remained strong.
The February reading of the University of Michigan's consumer sentiment index was revised up to 95.4 from the preliminary reading of 93.6. While this was down from the previous month final reading of 98.1, it was the second highest level since January 2007.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, ended the day almost unchanged at 95.29, not far from Thursday’s one-month highs of 95.43.
The dollar rallied on Thursday after stronger-than-forecast data on U.S. durable goods orders added to indications that the economic recovery is on track.
Earlier in the week, Federal Reserve Chair Janet Yellen said that if the economy keeps improving as the bank expects it will modify its forward guidance, but emphasized that a modification of its language should not be read as indicating that a rate hike would automatically happen within a number of meetings.
In the week ahead, Friday’s U.S. employment report will be closely watched, survey data on U.K. private sector activity and Thursday’s Bank of England rate review 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, March 2
The U.K. is to publish private sector data on house price inflation, as well as what will be a closely watched report on manufacturing activity.
In the U.S., the Institute of Supply Management is to report on manufacturing activity.
Tuesday, March 3
The U.K. is to publish the results of a survey on construction sector activity.
Wednesday, March 4
The U.K. is also to release survey data on service sector activity.
The U.S. is to release the ADP non-farm payrolls report, while looks at private sector jobs growth. Later in the day, the ISM is to report on services sector activity.
Thursday, March 5
The Bank of England is to announce its official bank rate.
The U.S. is to release the weekly report on initial jobless claims and data on factory orders.
Friday, March 6
The U.S. is to round up the week with the closely watched government report on nonfarm payrolls, the unemployment rate and average earnings and a report on the trade balance.