Investing.com - The dollar rose against a currency basket on Friday after data showing that U.S. first quarter economic growth was revised higher, while sterling was sharply lower amid jitters over the upcoming UK elections.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.2% to 97.33 late Friday after touching a one-week high of 97.47 earlier.
The U.S. economy slowed less than initially thought in the first three months of the year. Gross domestic product grew at an annual rate of 1.2% in the three months to March, the Commerce Department said, up from an initial estimate of 0.7%.
It was still the weakest expansion since the first three months of 2016, but economists think growth is likely to rebound sharply in the current quarter.
The dollar had come under pressure earlier in the week after the minutes from the Federal Reserve’s latest meeting tempered some more hawkish rate hike expectations.
Fed officials agreed they should hold off on raising interest rates until it was clear a recent U.S. economic slowdown was temporary, though most said a hike was coming soon.
The euro was lower against the dollar late Friday, with EUR/USD down 0.26% at 1.1182.
Against the yen, the dollar remained weaker, with USD/JPY down 0.43% at 111.34.
Sterling fell to one-month lows, with GBP/USD dropping 1.1% to 1.2798 after an opinion poll showing that the Labor Party narrowed the gap on the ruling Conservative Party ahead of upcoming elections, adding to political risks surrounding Brexit.
Investors had been confident that Prime Minister Theresa May would secure a strong win in the election, strengthening her hand in Brexit negotiations and allowing her to ignore lawmakers pushing for a hard Brexit.
The pound plumed two-month lows against the euro, with EUR/GBP rising 0.82% to 0.8732.
In the week ahead, traders will focus on Friday’s U.S. employment report for further signs of the Fed’s likely rate hike trajectory through the end of the year.
In the euro zone, investors will await monthly inflation data to assess the timing of when the ECB may start unwinding its massive asset purchase program.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, May 29
Financial markets in the UK and the U.S. will be closed for holidays.
ECB President Mario Draghi is to testify about the economy and monetary developments before the Economic and Monetary Affairs Committee, in Brussels.
Tuesday, May 30
Financial markets in China will be closed for a holiday.
Australia is to release data on building approvals.
Germany is to produce preliminary data on inflation.
The U.S. is to report on personal income and expenditure along with data on consumer confidence.
Wednesday, May 31
The Reserve Bank of New Zealand is to publish its financial stability report.
China is to release official figures on manufacturing and service sector activity.
Germany is to report on retail sales.
The UK is to release figures on bank lending.
The euro zone is to publish preliminary data on inflation.
Canada is to release data on economic growth.
The U.S. is to report on pending home sales and business activity in the Chicago region.
Thursday, June 1
Australia is to release data on private capital expenditure and retail sales.
China is to publish its Caixin services PMI.
The UK is to release its manufacturing PMI.
The U.S. is to release the ADP nonfarm payrolls report and the weekly report on initial jobless claims, while the Institute for Supply Management is to release its non-manufacturing PMI.
Friday, June 2
The UK is to release its construction PMI.
Both Canada and the U.S. are to release trade data and the U.S. is to round up the week with the non-farm payrolls report for May.