Forex – GBP/USD weekly outlook: July 14 – 18


Pound slips lower vs. dollar, still supportedPound slips lower vs. dollar, still supported – The pound slipped lower against the dollar on Friday after weak U.K. construction data but remained supported above the 1.71 level, not far from almost six-year highs.

GBP/USD slid 0.15% to 1.7106 late Friday, to end the week down 0.27%.

Cable is likely to find support at 1.7050 and resistance at 1.7178, the high of July 4 and the most since October 2008.

Sterling moved lower after data showed that U.K. construction output fell 1.1% in May, the biggest decline since February. On a year-over-year basis, output was still up 3.5%.

The report came after data earlier in the week showed that manufacturing production in the U.K. fell 1.3% in May, the fastest decline in 16 months.

The weak data prompted investors to pare back long positions on the pound, but losses were held in check as the negative reports did little to alter expectations that the Bank of England will hike interest rates before the end of the year.

The BoE left rates on hold at 0.5% following its policy meeting on Thursday, as widely expected, and kept the size of its asset purchase program unchanged at 375 billion.

In the U.S., Wednesday’s minutes of the Federal Reserve’s latest meeting indicated that interest rates are unlikely to rise soon.

The minutes of the central bank’s June meeting showed that officials agreed to end the bank’s asset purchase program in October, but revealed little new information on when rates could start to increase.

Officials said policy depends most “on the evolution of the economic outlook.”

In the week ahead, investors will be watching testimony by Federal Reserve Chair Janet Yellen and BoE Governor Mark Carney. U.K. data on inflation and employment will also be in focus.

Ahead of the coming week, 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, July 15

The U.K. is to release private sector data on retail sales, as well as a report on consumer price inflation.

BoE Governor Mark Carney is to testify on the bank’s financial stability report to parliament’s Treasury committee.

The U.S. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to release data on import prices, business inventories and manufacturing activity in the Empire state.

Wednesday, July 16

The U.K. is to publish data on the change in the number of people employed and the unemployment rate, as well as data on average earnings.

The U.S. is to release reports on producer price inflation and industrial production. Meanwhile, Fed Chair Janet Yellen Carney is to testify on monetary policy to the House financial committee.

Thursday, July 17

The U.S. is to publish reports on initial jobless claims, housing starts, building permits, and the Philly Fed manufacturing index.

Friday, July 18

The U.S. is to round up the week with preliminary data from the University of Michigan on consumer sentiment.

Source By Breaking News Website | BreakingNews.WS