Forexpros - The pound was lower against the broadly stronger U.S. dollar on Friday, after stronger-than-expected U.S. jobs data boosted demand for the greenback, while uncertainty over the upcoming U.S. presidential elections also weighed.GBP/USD hit 1.6174 on Thursday, the pair’s highest since October 17; the pair subsequently consolidated at 1.6020 by close of trade on Friday, down 0.46% for the week.
Cable was likely to find support at 1.5935, the low of October 24 and resistance at 1.6132, Friday’s high.
The U.S. Department of Labor said the economy added 171,000 jobs in October, beating forecasts for an increase of 125,000. The unemployment rate ticked up to 7.9% from 7.8% in September as more people re-entered the labor force.
The stronger-than-expected data saw investor’s trim back expectations for another round of quantitative easing by the Federal Reserve, bolstering demand for the greenback.
Demand for the greenback continued to be underpinned by uncertainty over the outcome of Tuesday’s U.S. presidential elections, with opinion polls indicating a dead heat between President Barack Obama and Republican challenger Mitt Romney.
Investors are concerned over the U.S. fiscal cliff, approximately USD600 billion in tax hikes and spending cuts due to come into effect on January 1, which could threaten U.S. and global growth.
Market sentiment was also hit by ongoing uncertainty over when Spain may request a bailout and whether Greece can implement austerity measures in order to secure the next tranche of its bailout funding.
The pound was higher against the greenback earlier in the session after data showed that the U.K.’s construction purchasing managers’ index for October rose to 50.9 from 49.5 the previous month, beating expectations for a decline to 49.1.
The data added to hopes for a sustained economic recovery after official data in late October showed that the U.K. economy emerged from a recession in the third quarter.
On Thursday, a report showed that the U.K. manufacturing PMI fell to 47.5 in October from a reading of 48.4 in September, compared to expectations for a dip to 48.1.
In the coming week, investors will be anticipating the outcome of Tuesday’s U.S. presidential elections and looking ahead to policy meetings by the Bank of England and the European Central Bank on Thursday.
In addition, market participants will be awaiting any further developments in the handling of the debt crisis in the euro zone.
Ahead of the coming week, Forexpros has compiled a list of these and other significant events likely to affect the markets.
Monday, November 4
The U.K. is to release data on service sector activity, a leading indicator of economic health.
In the U.S., the Institute of Supply Management is to publish data on service sector activity.
Tuesday, November 6
--> The U.K. is to release official data on manufacturing and industrial production, leading indicators of economic health.
In the U.S, voting in the U.S. presidential elections is to take place.
Wednesday, November 7
The U.S. is to publish government data on crude oil stockpiles.
Thursday, November 8
The U.K. is to publish official data on the trade balance, while the BoE is to announce its benchmark interest rate.
Also Thursday, the U.S. is to publish official data on the trade balance as well as the weekly government report on initial jobless claims.
Friday, November 9
The U.S. is to round up the week with preliminary data from the University of Michigan on consumer sentiment, a leading indicator of economic health.
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