British Pound Drops on Disappointing Trade and Output Data
- The British Pound now looks set to challenge support rather than resistance after UK data on industrial production, manufacturing output and trade all missed expectations.
- The figures make an interest rate increase less likely and are therefore Pound-negative.
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UK data on industrial production, manufacturing output and trade all came in below consensus forecasts Friday, sending GBP/USD lower and EUR/GBP higher. The FTSE 100 index of leading London-listed stocks rose as Sterling fell but then eased back.
These signs of a weaker than expected UK economy make a near-term Bank of England rate increase less likely, although the central bank’s monetary policy committee will no doubt want to see upcoming average earnings and consumer price inflation figures before jumping one way or the other. Still, Pound weakness is likely to persist.
Chart: GBP/USD Five-Minute Timeframe (July 7, 2017)
For traders, the key support levels are the 1.26 round number and the 1.2584 low on June 22. These are more likely now to be challenged than the resistance at 1.30 and just above.
You can find all the figures that were released on the DailyFX calendar here.
--- Written by Martin Essex, Analyst and Editor
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