GBP/USD heads for lowest weekly close since December
- Stronger US dollar continues to be the main driver.
- GBP/USD trims losses on Friday, back above 1.3500.
The pound is consolidating weekly losses against the US Dollar on Friday. Despite rising back above 1.3500, Cable is about to post the lowest weekly close since December.
GBP/USD bottomed during the US session at 1.3485, the lowest intraday level in almost four months. The slide took place amid a rally of the US dollar across the board despite weak US employment data. Then it rebounded rising back above 1.3500 and near the end of the session was hovering around 1.3540/45.
The NFP report for April came below forecast at 164K against 192K. Wages rose 2.6% (annual) against expectations of 2.7%. The unemployment rate fell to 3.9%, it is the lowest level since December 2000 amid a decline in the participation rate. The greenback bottomed immediately after the report but quickly bounce sharply breaking previous highs.
On a weekly basis, the stronger US dollar continues to be the main driver. GBP/USD is suffering the third weekly loss in-a-row. From April 18 highs dropped more than 850 pips. The trend and the chart continue to point to the downside. Today the pair was rejected from below 1.3500; if it manages to remain on top it could remove bearish pressures.
BoE, US CPI
Next week, the key event in the UK will be the Bank of England meeting. On Thursday, the statement, the decision, and the Quarterly Inflation Report will be released. Most analysts expect no change in rates but the tone and the economic projections will influence on GBP. In the US, CPI and retail sales will be the key reports next weeks.