GBP/USD weekly outlook: Feb. 8-12

The week beginning Feb. 8 follows a choppy one for GBP/USD that began with the pound rising slightly against the dollar and ended with the pair plummeting to an 8-month low, amid a fresh wave of risk aversion. 

GBP/USD hit 1.5558 during the U.S. trading session on Friday, its lowest rate since May 21; although by the close of trade it had bounced back to 1.5638. The pair is likely to find support at 1.5513, the low of May 21, and resistance at 1.5918, Thursday's high. 

Ahead of the coming week, Forexpros has compiled a list of key economic events likely to affect the pair. The guide begins on Tuesday, since no major economic events are scheduled to take place on Monday in either Britain or the United States.

Tuesday, Feb. 9

Britain's Royal Institution of Chartered Surveyors will release its latest House Price Balance report, which measures the change in home prices.

Later in the day, Britain will publish its Trade Balance index, which measures the difference in worth between exported and imported goods, the largest component of a country's balance of payments.

Also Tuesday, the latest data for two indices tracking U.S. consumer confidence will be released: the IBD/TIPP Economic Optimism Index and ABC/Washington Post Consumer Confidence Index.

Wednesday, Feb. 10

The Bank of England will release its latest Inflation Report. This important quarterly document will address rising inflation in Britain and the central bank’s measures against it. The governor of the Bank of England, Mervyn King, will hold a press conference to accompany the report's release.

Later Wednesday, the U.S. will publish the latest figures for its Trade Balance index. The data are an important indicator of the country's growth and domestic demand. The U.S. deficit is expected to shrink from USD 36.4 billion to USD 35 billion.

The chairman of the Federal Reserve, Ben Bernanke, will later testify before the House Financial Services Committee in Washington, D.C. on the unwinding of emergency Federal Reserve liquidity programs and the economic outlook for the U.S. 

Thursday, Feb. 11

The U.S. will release key data on retail sales, core retail sales and initial jobless claims. After both types of data on retail sales disappointed last month, the latest figures are expected to rise on Thursday by 0.4%. 

The unemployment data are also expected to be upbeat. Analysts forecast the weekly figure to drop from 480,000 to 460,000.

Friday, Feb. 12

The non-profit organization The Conference Board will publish its monthly Leading Index, which measures Britain's overall economic health by combining indicators including building permits, new orders and money supply.

Later Friday, the University of Michigan will release a preliminary figure for its U.S. Consumer Sentiment Index, a leading indicator of future consumer spending.