Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Forex - GBP/USD weekly outlook: May 26 - 30

Published 05/25/2014, 10:17 AM
Updated 05/25/2014, 10:17 AM
Pound slips lower against stronger dollar at week's end

Pound slips lower against stronger dollar at week's end

Investing.com - The pound was lower against the broadly stronger dollar on Friday after U.S. housing data topped expectations, adding to optimism that the economic recovery in the U.S. is gaining traction.

GBP/USD ended Friday’s session at 1.6828, down 0.25% for the day.

Cable is likely to find support at 1.6770 and resistance at 1.6920, Wednesday’s high.

The dollar was boosted after the Commerce Department reported that sales of new homes rose by a larger-than-expected 6.4% to 433,000 in April, after two months of declines.

Analysts had been expecting a figure of 425,000. March's number was revised up from 384,000 to 407,000.

Elsewhere, sterling rose to its highest level in 17 months against the euro after weak German business sentiment data underlined expectations that the European Central Bank will ease monetary policy at its next meeting in June.

EUR/GBP touched lows of 0.8082, the lowest since December 2012 before pulling back to 0.8099 at the close, ending the week 0.69% lower.

The drop in the euro came after a report showed that the German Ifo business climate index declined to 110.4 in May; the lowest reading this year, from 111.2 in April, indicating that economic activity could slow in coming months.

The data came one day after a report showing that manufacturing activity in the euro zone expanded at the slowest rate in six months in May.

Recent comments by senior ECB officials have signaled that the bank is open to acting as soon as June to stop inflation in the currency bloc from falling too low.

On Thursday, ECB Governing Council member Jens Weidmann said the bank is prepared to take unconventional measures to counter the risks of low inflation in the euro zone.

Demand for the pound was underpinned after Wednesday’s minutes of the Bank of England’s May meeting indicated that some policymakers believe the decision on when to raise rates is "becoming more balanced," indicating that they are becoming more hawkish about the argument for hiking interest rates.

Sterling received an additional boost after data on Wednesday showing that U.K. retail sales jumped in April bolstered the outlook for the broader recovery.

Retail sales jumped 1.3% in April, the Office of National Statistics said, more than double forecasts for a 0.5% increase, driven by higher food sales over the Easter holiday.

In the coming week, markets in the U.K. will be closed for a public holiday on Monday, while U.S. markets will also be closed for the Memorial Day holiday. Investors will be looking ahead to revised data on U.S. first quarter growth, while the U.K. is not scheduled to release any major data.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, May 26

Markets in the U.K. are to remain closed for a public holiday, while U.S. markets will also be closed, for the Memorial Day holiday.

Tuesday, May 27

The U.K. is to publish a private sector report on mortgage approvals.

The U.S. is to produce data on durable goods orders, house price inflation and consumer confidence.

Wednesday, May 28

The U.K. is to publish private sector data on retail sales.

Thursday, May 29

The U.S. is to release revised data on first quarter GDP, as well as the weekly government report on initial jobless claims and data on pending home sales.

Friday, May 30

The U.S. is to round up the week with a report on personal income and expenditure and revised data from the University of Michigan on consumer sentiment.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.