A Surprising Rise in Industrial Production Fuels Hopes for UK Q1 Expansion
THE TAKEAWAY: UK industrial production rises 1% in February, more than expected -> Hopes raised for Q1 expansion -> Cable rises above 1.53
A better than expected rise in UK industrial production helped the Pound continue a rally to back above 1.5300 against the US Dollar. Industrial production rose 1.0% over February, beating expectations for 0.4% and up from the revised 1.3% decline in production in January. Industrial production was down 2.2% from February 2012, according to the Office for National Statistics.
Additionally, manufacturing production rose 0.8% over February, beating expectations for a 0.4% rise in factory production. In negative news for the UK economy, the total trade balance declined to a new six month low of -3.642 billion Pounds in February, versus expectations for -2.8 billion Pounds and down from a revised 2.494 billion Pound trade deficit in January.
Pound investors remain focused on economic performance in the first quarter of this year. UK GDP declined 0.4% in Q4, and is now one quarter away from entering a technical triple dip recession. A recent PMI report for March said improvements in the services industry has probably led the UK economy to growth in the recently ended Q1.
GBP/USD continues to trade above 1.5300 at the time of this writing, and support may continue to be provided by a recent broken resistance line around 1.5250. Resistance may be provided by an upward trend line, currently near 1.5396.
German Finance Minister Schaeuble met with US Treasury Secretary Lew in Europe today. Lew said that the US has an immense stake in Europe and that new policies driving consumer demand would help. Schaeuble commented that there is no contradiction between growth and consolidation.
In economic releases, the Swiss deflation rate fell to an eight month low at -0.6%. The Franc saw small losses following the release. In Germany, the trade balance rose more than expected to 16.8 billion Euros in February. There was no significant Euro reaction to the German trade balance.
(Learn how to incorporate the RSI into your trading!)
GBPUSD Daily: April 09, 2013
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.