Investing.com - The pound was close to its highest in almost six-years against the dollar on Friday, as expectations for a rate hike by the Bank of England this year continued to underpin demand for sterling.
GBP/USD was at 1.7158 late Friday, after touching highs of 1.7178 earlier, the most since October 2008.
Cable is likely to find support at 1.7125 and resistance at 1.8000.
Sterling has strengthened broadly since the start of this year, gaining more than 15% against the dollar amid expectations that the deepening U.K. recovery will prompt the BoE to raise rates before the end of the year.
Data on Thursday showed that activity in the U.K. service sector slowed slightly in June, but growth remained robust with new business growth and payrolls increasing.
The Markit U.K. services purchasing managers’ index slowed to 57.7 in June from 58.6 in May. It was the lowest reading in three months, but remained well above the 50 level separating growth from contraction.
In the U.S., a robust nonfarm payrolls report for June sparked speculation that the Federal Reserve could bring forward its timetable for raising interest rates.
The Labor Department reported Thursday that that U.S. economy added 288,000 jobs last month, well above expectations for jobs growth of 212,000.
The previous month’s figure was revised up to a gain of 224,000 from a previously reported increase of 217,000.
The unemployment rate ticked down to 6.1% from 6.3% in May, the lowest in almost six years. The data was released a day early, ahead of the Independence Day holiday on Friday.
Elsewhere Friday, the pound rose to almost two-year highs against the euro, with EUR/GBP down 0.14% to 0.7921, the weakest since September 2012.
The euro came under pressure after the European Central Bank reiterated that it could use "unconventional measures" to combat persistently low levels of inflation in the euro area.
The ECB left all rates on hold on Thursday, in a widely anticipated decision, after cutting rates to record lows in June.
In the week ahead, investors will be focusing on Wednesdays’ minutes of the Federal Reserve’s June meeting, with few other major U.S. economic reports on the calendar. Meanwhile, the BoE is to hold its monthly rate setting meeting.
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 and Friday, as there are no relevant events on these days.
Tuesday, July 8
The U.K. is to release data on manufacturing and industrial production.
Wednesday, July 9
The Federal Reserve is to publish the minutes of its June meeting.
Thursday, July 10
The U.K. is to release data on the trade balance, while the BoE is to announce its benchmark interest rate.
Later Thursday, the U.S. is to release the weekly government report on initial jobless claims.