GBP/USD hit session highs of 1.5238 on Friday, the pair’s highest since May 21, before turning low to settle at 1.5195, 0.24% lower for the day, but up 0.47% for the week.
Cable is likely to find support at 1.5108, Thursday’s low and resistance at 1.5238, Friday’s high.
The University of Michigan said its consumer sentiment index rose to 84.5 in May, its highest level since July 2007, from76.4 in April and up from a preliminary estimate of 83.7.
A separate report showed that manufacturing activity in the Chicago-area improved at the fastest pace in over a year last month.
Market research group Kingsbury International said its Chicago purchasing managers’ index jumped to a seasonally adjusted 58.7 in May from a reading of 49.0 in April. Analysts expected a reading of 50.3
The robust data bolstered expectations that the Federal Reserve could begin to scale back its USD85 billion a month asset purchase program this year.
The upbeat reports came after the Commerce Department said U.S. consumer spending fell 0.2% in April, confounding expectations for a 0.2% increase, as personal income stagnated.
Sterling rallied to a two-week high on Thursday after data showed the U.S. economy grew slower-than-initially expected in the first quarter, dampening speculation over whether the Fed will unwind its easing program.
In the week ahead, market players will be focusing on the outcome of a policy meeting by the Bank of England.
Investors will also be awaiting the release of Friday’s closely watched report on U.S. nonfarm payrolls for further hints regarding the direction of U.S. monetary policy.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, June 3
The U.K. is to produce data on manufacturing activity, a leading economic indicator.
Later in the day, the Institute of Supply Management is to release data on manufacturing activity in the U.S.
Tuesday, June 4
The U.K. is to release a report on construction sector activity, a leading economic indicator.
Later in the day, the U.S. is to release data on the trade balance, the difference in value between imports and exports.
Wednesday, June 5
The U.K. is also to release data on service sector activity, a leading indicator of economic health.
The U.S. is to release the ADP nonfarm payrolls report on private sector job creation, as well as government data on factory orders and crude oil stockpiles.
In addition, the Institute of Supply Management is release data on U.S. service sector activity, a leading economic indicator.
Thursday, June 6
The Bank of England is to announce its benchmark interest rate.
Meanwhile, the U.S. is to release the weekly government report on initial jobless claims.
Friday, June 7
The U.K. is to publish a report on consumer inflation expectations and data on the trade balance.
The U.S. is to round up the week with closely watched government data on nonfarm payrolls and the unemployment rate, as well as data on average hourly earnings.
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