Forexpros – The pound ended the week lower against the U.S. dollar on Friday, tracking the euro’s losses as ongoing worries over the European rescue package and Greece’s political turmoil weighed on demand for riskier assets.
GBP/USD hit 1.5875 on Thursday, the pair’s lowest since October 21; the pair subsequently consolidated at 1.6030 by close of trade on Friday, shedding 0.62% over the week.
The pair is likely to find support at 1.5875, the low of November 3 and resistance at 1.6165, the high of October 31.
Sterling bounced off a nine-day low on Thursday after the European Central Bank lowered its interest rate to 1.25% from 1.50% as the region’s escalating debt crisis overshadowed concerns over persistently high inflation.
Speaking at the bank’s post policy meeting press conference, new president Mario Draghi said that ongoing tensions in financial markets could slow the pace of growth in the euro zone and said the region’s economy continued to be “subject to particularly high uncertainty and intensified downside risks.”
Also Thursday, a report showed that activity in the U.K. service sector moderated in October but growth remained above the level that separates expansion from contraction for the tenth successive month.
The pound was almost unchanged against the greenback on Friday, amid uncertainty over a confidence vote in Greece and after German Chancellor Angela Merkel said that few countries in the Group of 20 nations had committed to providing more resources for the euro zone’s rescue fund.
Meanwhile, the dollar found support after data showed that the U.S. unemployment rate ticked down unexpectedly in October to 9.0% and that non-farm employment rose less-than-expected by 80K in October.
The pound fell sharply against the dollar on Tuesday after official data showing that the U.K. economy grew slightly more-than-expected in the third quarter was overshadowed by a report revealing that manufacturing activity in the U.K. fell to a 28-month low in October.
In the week ahead, developments in Greece will remain in focus, as opposition parties are calling for early elections while George Papandreou is pushing for a cross-party government to implement the latest European aid package.
Investors will also be closely watching for the U.S. weekly report on unemployment claims as well as an interest rate statement by the Bank of England.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday, November 7
The U.K. is to release a report on house price inflation, a leading indicator of the housing industry’s health.
Tuesday, November 8
The U.K. is to produce industry data on retail sales, followed by a report on house price balance, a leading indicator of housing inflation. Later Tuesday, an official report is to be released on U.K. manufacturing activity as well as preliminary data on gross domestic product.
Wednesday, November 9
The U.K. is to publish an official report on trade balance.
In the U.S., Federal Reserve Chairman Ben Bernanke is due to deliver welcoming remarks at the Federal Reserve Conference on Small Business and Entrepreneurship during an Economic Recovery. An official report on U.S. crude oil inventories is also to be released later Wednesday.
Thursday, November 10
The U.K. is to publish a report on the Bank of England asset purchase facility, as well as a statement on its interest rate.
Meanwhile, the U.S. is also to release a report on trade balance as well as weekly data on unemployment claims. Later in the day, government reports are to be released on import prices and federal budget balance.
Friday, November 11
The U.K. is to produce an official report on producer price inflation, a leading indicator of consumer inflation.
The U.S. is to round up the week with the University of Michigan’s preliminary report on consumer sentiment.
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