Investing.com - Sterling ended the week trading close to recent four-and-a-half year highs against the dollar after upbeat data on U.K. retail sales bolstered the outlook for the wider economic recovery.
GBP/USD touched highs of 1.6831 on Friday, not far from the peaks of 1.6840 struck on April 17. The pair trimmed back gains to settle at 1.6799, ending the week fractionally higher.
Cable was likely to find support at 1.6761, Wednesday’s low and resistance at 1.6840.
The pound rose to session highs after the Office of National Statistics reported that U.K. retail sales rose 0.1% in March, compared to expectations for a 0.4% decline. On year-over-year basis retail sales were up 4.2%, ahead of expectations for a 3.8% increase.
The upbeat data added to the view that the Bank of England could raise interest rates as soon as the first quarter of 2015.
In the U.S., data on Friday showed that consumer confidence rose to a nine-month high in April, adding to signs that the economy is improving.
The University of Michigan reported that its consumer sentiment index came in at 84.1 this month, up from 80 in March and the preliminary reading of 82.6. Analysts had expected the index to rise to 83.0.
Meanwhile, concerns over the conflict between Russian and Ukraine escalated on Friday after U.S. Secretary of State John Kerry warned that Washington was ready to step up sanctions on Russia.
The West is accusing Russia of leading a separatist revolt in eastern Ukraine after it annexed Crimea last month.
In the week ahead, investors will be focusing on Friday’s U.S. jobs report for April and the outcome of the Federal Reserve’s two-day policy meeting on Wednesday. U.K. data on first quarter growth and a report on manufacturing activity will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, April 28
The U.S. is to release private sector data on pending home sales.
Tuesday, April 29
The U.K. is to release preliminary data on first quarter gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health.
The U.S. is to a report compiled by the Conference Board on consumer confidence.
Wednesday, April 30
The U.S. is to release preliminary data on first quarter GDP, as well as the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. The U.S. is also to release data on manufacturing activity in the Chicago region.
Later in the day, the Federal Reserve is to announce its federal funds rate and publish its rate statement.
Thursday, May 1
The U.K. is also to produce a report on manufacturing activity, in addition to data on net lending.
The U.S. is to publish the weekly report on initial jobless claims. At the same time, Fed Chair Janet Yellen is to speak at an event in Washington; her comments will be closely watched.
Later Thursday, the Institute of Supply Management is to release a report on manufacturing activity.
Friday, May 2
The U.K. is to release data on construction sector activity.
The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate, and a separate report on factory orders.
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