GBP/USD ended Friday’s session at 1.5923, down 0.68% for the day. The pair ended the week with losses of 1.32%.
The pair is likely to find support at 1.5775, the low of September 13 and resistance at 1.6045, Friday’s high.
The dollar gained ground after the Institute of Supply Management said its manufacturing purchasing managers’ index rose to 56.4 in October, the highest since April 2011, from 56.2 in September. Economists had expected the index to tick down to 55.0.
The Fed left its USD85 billion-a-month asset purchase program in place following its monthly meeting on Wednesday and was less pessimistic than expected in its assessment of the economy. Fed officials said the economy is expanding "at a moderate pace" and said downside risks were diminishing.
The bank gave no clear indication whether it would start scaling back stimulus at the December meeting or continue it into the start of 2014.
Earlier Friday, data showed that manufacturing activity in the U.K. edged down slightly more than expected in October.
The U.K. manufacturing purchasing managers’ index ticked down to 56 from 56.3 in September, only moderately below August’s two-year highs of 57.1. Analysts had forecast a reading of 56.1.
The report said total new orders rose at a rate close to August’s 19-year peak, as new export business rose at the fastest pace since February 2011.
Elsewhere, sterling ended the week sharply higher against the euro, with EUR/GBP losing 0.83% to settle at 0.8472.
The single currency weakened across the board after data on Thursday showing that euro zone inflation fell to a four year low in October raised concerns that the European Central Bank may ease monetary policy as soon as this week to help shore up growth.
Eurostat said consumer price inflation in the currency bloc slowed to 0.7% in October, the slowest pace since November 2009, from 1.1% in September.
A separate report showed that the euro zone unemployment rate rose to a record high 12.2% in September.
On Friday the U.S. is to release the nonfarm payrolls report for October, which will help assess expectations for a possible reduction in Fed stimulus.
Data released on Wednesday showed that the U.S. private sector added fewer jobs than expected in October. Payroll processing firm ADP said non-farm private employment rose by a seasonally adjusted 130,000 in October, below expectations for an increase of 150,000.
The U.S. is also to release preliminary data on third quarter economic growth, while the Bank of England is to announce its benchmark interest rate.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, November 4
The U.K. is to publish data on construction sector activity, a leading economic indicator.
The U.S. is to release data on factory orders, a leading indicator of production.
Tuesday, November 5
The U.K. is to release private sector data on retail sales, an important economic indicator. The U.K. is also to publish data on service sector activity, a leading economic indicator.
In the U.S., the ISM is to release a report on service sector activity.
Wednesday, November 6
The U.K. is to produce a report on manufacturing and industrial production.
Thursday, November 7
The Bank of England is to announce its benchmark interest rate.
The U.S. is to publish a preliminary estimate of third quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth. Meanwhile, the Labor Department is to release its weekly report on initial jobless claims.
Friday, November 8
The U.K. is to release data on the trade balance.
The University of Michigan is to release the preliminary reading of its consumer sentiment index. The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.
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