Talking Points
- UK trade deficit widens due to an increase in imports of ‘erratic goods.’
- GBP weakens on poor manufacturing and industrial production data.
- See the DailyFX Economic Calendar and see what live coverage for key event risk impacting FX markets is scheduled for next week on the DailyFX Webinar Calendar.
The UK visible trade balance widened in February to -£12.46 billion from -£11.98 billion (revised) in January. The deficit on trade in goods and services widened to £3.7 billion in February 2017 from a revised deficit of £3.0 billion in January 2017, predominantly due to an increase in imports of erratic goods, according to the Office for National Statistics (ONS) release.
Commenting on today’s short-term indicators data, ONS senior statistician Kate Davies wrote, “While manufacturing was broadly flat in February, unseasonably warm weather reduced gas and electricity seun, pulling down overall production.The overall trade deficit worsened, but excluding erratic items the picture improved, as imports fell more than exports. There were small falls across a range of construction subsectors for the second month running, following a record performance for the industry at the end of 2016.”
UK industrial production year-on-year fell to 2.8% from a prior 3.3% and against expectations of 3.7%, while manufacturing production came in at 3.3%, missing expectations of 3.9% but beating January’s revised lower figure of 2.6%.
GBPUSD fell on the release with cable dropping to 1.24300 from 1.24700 as the latest batch of hard UK economic data points to a hard start to 2017.
Chart: GBPUSD 5-Minute Timeframe (April 7, 2017).
--- Written by Nick Cawley, Analyst
To contact Nick, email him at Nicholas.cawley@ig.com
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