GBP/USD hit 1.5895, the pair’s highest since August 23; the pair subsequently consolidated at 1.5863 by close of trade, 0.28% higher on the week.
Cable is likely to find support at 1.5777, Friday’s low and resistance at 1.5911, the high of August 23 and a three-and-a-half month high.
Speaking at the Fed’s annual symposium in Jackson Hole, Wyoming, Bernanke said the persistently high rate of unemployment was a “grave concern” and reiterated that the central bank was ready to provide additional policy accommodation as needed to shore up growth.
Official data on Wednesday showed that the U.S. economy expanded at a seasonally adjusted annual rate of 1.7% in the three months to June, slightly higher than the preliminary estimate of 1.5%, but remained below the 2-2.5% rate required every quarter to hold the unemployment rate steady.
Bernanke downplayed the risks of quantitative easing and said the program had been effective in providing “meaningful support" to the recovery.
The pound ended the week slightly lower against the euro, with EUR/GBP settling at 0.7928 by close of trade on Friday, up 0.22% on the week.
Demand for the euro continued to be underpinned by expectations that the European Central Bank is working on measures to help stabilize the euro zone's sovereign debt markets ahead of its upcoming policy meeting on September 6.
On Thursday, Italy saw borrowing costs ease at an auction of five and 10-year bonds, reflecting renewed optimism that European leaders are making progress in tackling the region’s debt crisis.
Meanwhile, sentiment on sterling remained fragile as concerns over broad economic weakness kept alive expectations for another round of monetary easing by the Bank of England.
In the week ahead, the BoE is to hold its monthly policy meeting on Thursday, but is widely expected to leave monetary policy unchanged.
Investors will also be focusing on the ECB’s post-policy meeting press conference on Thursday, as investors await more details about the size and scope of the bank’s bond purchasing program from President Mario Draghi.
The U.S. is to release its monthly report on non-farm payrolls on Friday, which will allow investors to gauge the strength of the faltering labor market.
Ahead of the coming week, forex trading outlook today has compiled a list of these and other significant events likely to affect the markets.
Monday, September 3
The U.K. is to release data on manufacturing activity, a leading indicator of economic health.
Markets in the U.S. are to remain closed for the Labor Day holiday.
Tuesday, September 4
The U.K. is to publish industry data on house price inflation, a leading indicator demand in the housing sector, as well as industry data on retail sales. The U.K. is also to release data on construction sector activity.
The U.S. is to publish a report by the Institute for Supply Management on manufacturing PMI.
Wednesday, September 5
The U.K. is to release data on service sector activity, a leading indicator of economic health.
Later in the day, the U.S. is to produce revised data on nonfarm productivity.
Thursday, September 6
In the U.K., the BoE is to announce its benchmark interest rate.
The U.S. is to produce a report on ADP non-farm employment change, followed by weekly government data on unemployment claims and crude oil stockpiles. In addition, the ISM is to release a report on non-manufacturing activity.
Friday, September 7
The U.K. is to produce official data on manufacturing production and producer price inflation, followed by a BoE report on consumer inflation expectations.
The U.S. is to round up the week with closely watched official data on non-farm payrolls and the unemployment rate, as well as a report on average hourly earnings.
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