Investing.com - The pound fell to six-week lows against the broadly stronger dollar on Friday as stronger than forecast U.S. consumer sentiment data fuelled speculation over a possible near-term exit from the Federal Reserve’s asset purchase program.
GBP/USD hit 1.5158, the pair’s lowest since April 4, before settling at 1.5168, 0.65% lower for the day and down 0.92% for the week.
Cable is likely to find support at 1.5074, the low of April 3 and resistance at 1.5281, Friday’s high.
The University of Michigan said its consumer sentiment index jumped to 83.7 in May, its highest level since 2007, from 76.4 in the preceding month, outstripping expectations for a reading of 78.0.
A separate report by the Conference Board showed that its index of leading economic indicators rose 0.6% in April, more than double the 0.2% increase expected by economists.
The robust data bolstered expectations that the Federal Reserve could begin to scale back its USD85 billion a month asset purchase program this year.
The data came after a series of economic data releases on Thursday raised doubts over the strength of the U.S. economic recovery.
Official data showed that consumer price inflation and housing starts fell more-than-expected in April, while jobless claims posted the largest increase in six months.
In the U.K., the Bank of England revised up its forecast for growth on Wednesday, saying it now expected the economy to expand by 0.5% in the current quarter, up from 0.3% in the three months to March.
The bank also said it expects inflation to remain above its 2% target for most of the next two years.
In the week ahead investors will be focusing on Wednesday’s Federal Reserve minutes, as well as testimony on the economic outlook and monetary policy by Fed Chairman Ben Bernanke.
Markets will also be watching Wednesday’s Bank of England minutes and Tuesday’s U.K. inflation data.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, May 20
The U.K. is to release private sector data on house price inflation.
Tuesday, May 21
The U.K. is to produce government data on consumer price inflation, which accounts for the majority of overall inflation, as well as data on producer and retail price inflation.
Wednesday, May 22
The BoE is to publish the minutes of its most recent policy setting meeting, which contain important insights into economic conditions from the banks perspective.
The U.K. is to release official data on public sector net borrowing, as well as a report on industrial order expectations.
The U.S. is to release data on existing home sales, a leading indicator of economic health, while the Federal Reserve is to publish the minutes of its most recent policy-setting meeting.
Meanwhile, Fed Chairman Ben Bernanke is to testify on the economy and monetary policy in Washington.
Thursday, May 23
The U.K. is to publish official data on retail sales, as well as revised data on first quarter economic growth and a report on business investment.
The U.S. is to release the weekly government report on initial jobless claims and official data on new home sales, a leading indicator of economic health.
Friday, May 24
The U.K. is to release industry data on mortgage approvals, an important indicator of demand in the housing market.
The U.S. is to round up the week with government data on durable goods orders, a leading indicator of production.