Dismal Data Drives Pound Lower
The Pound Sterling was unable to maintain the momentum it held in the hours before the release of key economic data. The UK Office of National Statistics reported that manufacturing and industrial production fell unexpectedly in April, both on a month-over-month and year-over-year basis. Manufacturing fell to -1.4% from -0.1% against an expected rise to 0.3% (month-over-month) while industrial production fell to -0.8% from 0.1%, with analysts predicting a rise to 0.3%. That news which seems to confirm a weak first quarter for the economy overall pushed the Pound lower and has investors concerned about the timing of the next potential rate hike from the Bank of England.
As reported at 10:51 am (BST) in London, the GBP/USD was trading lower at $1.3365, down 0.27% and just off the earlier trough of $1.3361; the session high is at a distant $1.3441. The EUR/GBP is trading at 0.88191 Pence, a gain of 0.43811%; the pair has ranged from a low of 0.87738 Pence to a peak of 0.88272 Pence.
Parliamentary Vote Eyed
Analysts caution FX traders that, regardless of the fundamentals, the Pound Sterling is unlikely to see any significant gains until after the vote in the British Parliament to approve amendments to the withdrawal bill. That vote is due to take place tomorrow. There are concerns that a vote against any of the amendments could result in the “hard” Brexit that investors fear.