Investing.com - The pound remained supported above the 1.70 level against the dollar on Friday, trading within striking distance of six-year highs amid heightened expectations for a U.K. rate hike before the end of the year.
GBP/USD ended Friday’s session at 1.7036, up slightly from 1.7024 late Thursday. The pair touched a high of 1.7062 on June 19, the strongest level since October 2008.
Cable was likely to find support at 1.6969, Thursday’s low and resistance at 1.7062.
Data on Friday confirmed that the U.K. economy expanded by 0.8% in the first three months of 2014. The economy grew at an annual rate of 3.0% in the first quarter, the fastest since 2007.
Earlier Friday, Bank of England Governor Mark Carney indicated that rates were unlikely to return to their pre-crisis levels of 5%, but instead could be expected to rise to around 2.5% by the first quarter of 2017.
The BoE announced a new affordability test on banks and a cap on home loans on Thursday, in a bid to prevent the housing market from destabilizing the U.K. economy.
Demand for sterling continued to be underpinned as the new measures did little to alter expectations that the BoE will raise interest rates ahead of other central banks.
The dollar remained broadly weaker after a report on Friday showing that consumer sentiment was revised higher this month did little to reassure investors about the outlook for the wider recovery.
The final reading of the University of Michigan''s consumer sentiment index rose to 82.5 this month from 81.9 in May, compared to expectations of 82.2.
The greenback remained under pressure after the Commerce Department reported Wednesday that the U.S. economy contracted at an annual rate of 2.9% in the first three months of the year, compared to the consensus forecast for a decline of 1.7%.
Another report on Thursday showed that U.S. consumer spending rose by just 0.2% in May, below forecasts for 0.4%.
In the week ahead, investors will be looking to the U.S. nonfarm payrolls report, due to be released one day early on Thursday, for further indications on the strength of the labor market. U.K. data on service sector activity 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.
Monday, June 30
The U.K. is to release data on net lending to individuals.
The U.S. is to produce data on manufacturing activity in the Chicago region and a report on pending home sales.
Tuesday, July 1
The Institute of Supply Management is to publish a report on U.S. manufacturing activity.
Wednesday, July 2
The U.K. is to produce private sector data on house price inflation, as well as data on construction activity.
The U.S. is to release the ADP report on private sector job creation, as well as data on factory orders.
Later Wednesday, Fed Chair Janet Yellen is to speak at an event in Washington; her comments will be closely watched.
Thursday, July 3
The U.K. is to release data on service sector expansion.
The U.S. is to release data on the trade balance, as well as the weekly report on initial jobless claims.
The U.S. is also to publish what will be closely watched government data on nonfarm payrolls and the unemployment rate, one day ahead of schedule due to the fourth of July holiday.
Later Thursday, the ISM is to publish a report service sector activity.
Friday, July 4
Markets in the U.S. are to remain closed for the Independence Day holiday.