Investing.com - The pound moved higher against the dollar on Friday, recovering from a one-month low reached in the previous session, but gains were limited following the release of mixed U.S. economic data.
GBP/USD ended Friday’s session at 1.6812, up 0.12% for the day after falling to lows of 1.6730 on Thursday, the weakest since April 16. For the week, the pair lost 0.35%.
Cable was likely to find support at 1.6730 and resistance at 1.6881, the high of May 13.
The Commerce Department reported Friday that U.S. housing starts rose 13.2% last month, after a 2.0% increase in March.
It was the largest increase in five months, indicating that the economy is shaking off the effect of a weather related slowdown over the winter.
The upbeat housing data was overshadowed by a report showing that consumer confidence in the U.S. deteriorated this month. The University of Michigan''s consumer sentiment index dropped to 81.8, from 84.1 in April. Analysts had expected a slight uptick to 84.5.
Sterling remained broadly softer after the Bank of England played down speculation over the timing of possible rate hikes on Wednesday, saying the economic recovery was still at an early stage.
The BoE left its forecasts for growth and inflation largely unchanged in its quarterly Inflation Report and indicated that it is still in no rush to hike interest rates.
The bank said there is scope to further reduce the amount of slack in the economy before hiking rates and reiterated that when rates did start to rise they would do so only gradually.
The pound had already weakened earlier Wednesday after official data showed that the U.K. unemployment rate fell to a more than five-year low in the three months to March but wage growth slowed, dampening optimism over the recovery.
The U.K. unemployment rate dropped to 6.8% in the three months to March, down from 6.9% in February but average wages rose by a weaker than expected 1.7% in the first quarter from the same period a year earlier.
Elsewhere Friday, sterling was higher against the euro, with EUR/GBP at 0.8146 in late trade, not far from the 16-month trough of 0.8125 reached on Wednesday.
The single currency remained under pressure after weaker-than-expected data on euro zone first quarter growth on Thursday added to pressure on the European Central Bank to ease monetary policy at its next meeting in June, in order to safeguard the recovery in the region.
In the week ahead, investors will be looking to the minutes from the Federal Reserve''s latest monetary policy meeting, due for release on Wednesday, for insight on the central bank''s view of the economy.
U.K. data on consumer prices and retail sales 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.
The U.K. is to release data on consumer price inflation, which accounts for the majority of overall inflation.
In the U.S., Federal Reserve Bank of Philadelphia Charles Plosser and Federal Reserve Bank of New York President William Dudley are to speak.
Wednesday, May 21
The U.K. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. Meanwhile, the BoE is to publish the minutes of its May meeting.
Fed Chair Janet Yellen is to speak at an event in New York. Later Wednesday, the Fed is to publish the minutes of its latest meeting.
Thursday, May 22
The U.K. is to publish revised data on first quarter economic growth, as well as reports on business investment and public sector borrowing. The U.K. is also to produce private sector data on industrial order expectations.
The U.S. is to release its weekly report on initial jobless claims and private sector data on existing home sales.
Friday, May 23
The U.S. is to round up the week with data on new homes sales.
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