The British Pound has come under selling pressure Friday morning after the UK’s visible trade balance unexpectedly 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.
UK industrial production data was also worse than expected. Year-on-year it 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. The Pound also fell against the Euro and the Japanese Yen.
The British Pound is expected to remain weak in the long term. A spate of disappointing economic data have impacted UK interest rate expectations – and the bank of England remains extremely accommodative in its monetary policy.
--- Written by Oliver Morrison, Analyst
To contact Oliver, email him at oliver.morrison@ig.com
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