Investing.com - The pound pulled away from session lows against the dollar on Friday, to end the day little changed after the latest U.S. nonfarm payrolls report showed that the economy added the smallest number of jobs in three years in December.
GBP/USD recovered from session lows of 1.6382 and was last up 0.01% to 1.6480. For the week, the pair gained 0.42%.
Cable is likely to find support at 1.6350 and resistance at 1.6577, the high of December 31.
The dollar turned broadly lower after the Labor Department said the U.S. economy added 74,000 jobs in January, the smallest increase since January 2011 and well below expectations for 196,000 new jobs.
The unemployment rate fell to a five year low of 6.7% from 7% in November, but this was due in part to people dropping out of the labor force. The labor participation rate fell to an almost 35-year low of 62.8%.
Inclement weather in December contributed to the slowdown in hiring, as the construction sector cut 16,000 jobs, the biggest drop in the industry in 20 months.
The unexpectedly weak data tempered expectations that the Federal Reserve would cut its stimulus program again this month. The Fed cited a stronger labor market in its decision to cut its asset purchase program by USD10 billion in December, reducing it to USD75 billion-a-month.
The pound struggled to build on gains after data earlier Friday showed that U.K. manufacturing and industrial production were both flat from a month earlier in November, defying expectations for a 0.4% increase in each case.
The data sparked concerns that the rate of the economic growth in the U.K. slowed in the fourth quarter after expanding by 0.8% in the three months to September.
In the week ahead, investors will be closely watching U.S. data on retail sales, inflation and consumer sentiment, as well as speeches by two Federal Reserve officials on Tuesday. U.K. data on retail sales and inflation 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 Monday, as there are no relevant events on this day.
Tuesday, January 14
The U.K. is to release data on consumer price inflation, which accounts for the majority of overall inflation.
The U.S. is to produce data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The nation is also to release data on import prices and business inventories. Also Tuesday, Federal Reserve Bank of Philadelphia President Charles Plosser and Dallas Fed President Richard Fisher are to speak.
Wednesday, January 15
The U.S. is to release data on producer price inflation and a report on manufacturing activity in the New York region.
Thursday, January 16
The U.S. is to publish reports on consumer price inflation and initial jobless claims, in addition to data on manufacturing activity in Philadelphia. Meanwhile, Federal Reserve Chairman Ben Bernanke is to speak at an event in Washington.
Friday, January 17
The U.K. is to release data on retail sales.
The U.S. is to wrap up the week with the closely watched preliminary reading of the University of Michigan consumer sentiment index. The U.S. is also to release data on building permits, housing starts and industrial production.
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