Investing.com - The pound moved higher against the dollar on Friday, but gains were held in check as concerns over the prospect of Scottish independence continued to dampen investor demand for the British currency.
GBP/USD was up 0.18% to 1.6267 in late trade, having recovered from the 10-month lows of 1.6050 struck on Wednesday.
Cable is likely to find support at the 1.6050 level and resistance at around 1.6340.
Sterling found support after two new opinion polls on the Scottish independence referendum showed that support for the no campaign was back in the lead ahead of the September 18 referendum.
The pound weakened across the board earlier in the week after another opinion poll indicated that support for Scottish pro-independence voters had gained momentum, fuelling concerns over the prospect of a yes vote.
Uncertainty over what currency an independent Scotland would use, as well as concerns over how much of the U.K. national debt it would take sparked a broad based selloff in sterling.
Speaking Tuesday, Bank of England Governor Mark Carney warned that a currency union between an independent Scotland and the rest of the U.K. would be “incompatible with sovereignty”.
EUR/GBP was up 0.13% to 0.7968 late Friday, off the two month highs of 0.8060 set on Wednesday.
Demand for the dollar continued to be underpinned by expectations for an early hike in U.S. interest rates as investors began turning their attention to the upcoming Federal Reserve policy meeting.
The Fed was expected to cut its asset purchase program by another $10 billion at its meeting on Wednesday, which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.
Data on Friday showing that U.S. retail sales rose in August and another report showing that consumer sentiment rose to a 14-month high in September underlined the view that the economic recovery is deepening.
In the week ahead, investors will be closely watching opinion polls ahead of Thursday's Scottish referendum and awaiting Wednesday’s Fed policy announcement. Tuesday’s U.K. inflation report and Wednesday’s jobs report and BoE minutes 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. The guide skips Friday as there are no relevant events on this day.
Monday, September 15
The U.S. is to release reports on manufacturing activity in the Empire State and industrial production.
Tuesday, September 16
The U.K. is to publish data on consumer price inflation, which comprises the majority of overall inflation.
The U.S. is to produce data on producer price inflation.
Wednesday, September 17
The U.K. is to publish data on the change in the number of people employed and the unemployment rate, as well as data on average earnings. In addition, the Bank of England is to release the minutes of its latest policy meeting.
The U.S. is to produce data on consumer prices. Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement. Fed Chair Janet Yellen is to hold a press conference following announcement.
Thursday, September 18
The U.K. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. Meanwhile, Scotland is to hold its independence referendum.
The U.S. is to produce a flurry of economic data, including reports on initial jobless claims, building permits, housing starts and manufacturing activity in the Philadelphia region.