Investing.com - The pound moved lower against the dollar on Friday after data showed that the U.S. employment report for February was stronger than forecast, bolstering the outlook for the economic recovery.
GBP/USD ended Friday’s session down 0.15% to 1.6713. Earlier Friday, the pair rose to highs of 1.6786, not far from the more than four-year high of 1.6821 struck on February 17.
Cable was likely to find support at 1.6655, Wednesday’s low and resistance at 1.6821.
The U.S. economy added 175,000 jobs in February, the Labor Department reported, well above expectations for 149,000 new jobs. The unemployment rate ticked up to 6.7% from 6.6% in January, as more people joined the workforce.
The jobs report eased concerns over soft U.S. employment and other economic data seen in the past few months. The strong figure indicated that the Federal Reserve is likely to continue to scale back its stimulus program, which has weighed on the value of the dollar.
Demand for sterling continued to be underpinned after business survey data earlier in the week indicated that the economic recovery in the U.K. is continuing.
A report on Monday showed that the manufacturing activity expanded in February, while the pace of jobs growth in the sector reached a 33-month high. Meanwhile data on Wednesday showed that activity in the U.K. service sector slowed slightly in February, but growth remained robust.
The upbeat data reinforced the view that the Bank of England will raise interest rates as soon as next year.
The BoE left U.K. interest rates unchanged at their record low of 0.5% on Thursday, and also left its quantitative easing program steady at 375 billion pounds.
Elsewhere, sterling fell to one-month lows against the broadly stronger euro on Friday, with EUR/GBP ending Friday’s session at 0.8301, up 0.26%.
The euro added to the previous session’s strong gains after a report from the European Central Bank showed that banks in the euro area are set to repay a large portion of its emergency three-year loans next week.
The common currency strengthened across the board on Thursday as expectations for further monetary easing by the ECB dimmed after the bank refrained from tightening policy, saying economic conditions did not support such a move.
In the week ahead, U.S. data on retail sales and consumer sentiment will be closely watched, while BoE Governor Mark Carney’s testimony on the inflation outlook 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, March 11
The U.K. is to publish data on manufacturing production. Meanwhile, BoE Governor Mark Carney and several monetary policy committee members are to testify on inflation and the economic outlook before Parliament''s Treasury Committee.
Wednesday, March 12
The U.K. is to produce data on the trade balance, the difference in value between imports and exports.
Thursday, March 13
The U.S. is to release data on retail sales and import prices, in addition to the weekly government report on initial jobless claims.
Friday, March 14
The U.S. is to round up the week with data on producer price inflation and preliminary data from the University of Michigan on consumer sentiment.
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