Topic: Daily market news by Cozfx
COZforex: GBP/USD weekly outlook for 17 to 21Nov
COZforex: The pound dropped to fresh 14-month lows against the dollar on Friday, after the Bank of England said inflation was likely to slow further, prompting investors to delay expectations for a UK rate hike until late next year.
GBP/USD dropped to lows of 1.5594, the weakest since September 2013, before pulling back to 1.5671 in late trade, off 0.25% for the day. The pair ended the week with losses of 1.32%.
Sterling remained broadly weaker after the BoE said in its closely watched quarterly inflation report on Wednesday that inflation is likely remain below its 2% target in the near term and fall below 1% at some point during the next 6 months.
The bank said it now expects inflation to take 3 years to return to its 2% target.
The annual rate of UK inflation dropped to a 5 year low of 1.2% in September.
BoE Governor Mark Carney noted that since August markets had pushed back expectations for a rate increase to October of next year and added that investors were right to delay expectations.
The bank said it continued to expect economic growth of 3.5% this year but pared its forecast for growth in 2015 to 2.9% from 3.1% in August.
In the US, data on Friday showed that retail sales rise 0.3% in October, ahead of forecasts for a 0.2% increase.
In the week ahead, investors will be focusing on Wednesday’s minutes of the Federal Reserve’s October meeting and Thursday’s report on the US consumer price index. Tuesday’s report on UK inflation and Wednesday’s BoE minutes will also be closely watched.
(COZ forex UK)