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GBP/USD crashes on poor industrial output

UK industrial output is down 0.7% m/m, worse than flat expected, and manufacturing production is down -0.4%, different from +0.1% predicted. Year over year,  output is up only 0.9% against 1.7% predicted and manufacturing is down 1.2% against only -0.8% predicted.

GBP/USD is  dipping under 1.45 and reaching new lows.Cable is at the lowest since 2010, with the  low currently recorded at 1.4482.

The Bank of  England convenes on Thursday to make its rate decision.  The Bank is not expected to change its policy, but perhaps the single member voting for a hike will align with the majority. Manufacturing is only a small part of the economy and it has been sliding also in other parts of the world. I

n the US, many  believe this sector is in recession and in China, every weak manufacturing PMI release is felt all over the world. Britain is not alone in this.

Further support can be found only at 1.42. 1.46 is resistance.  The pound is also losing ground against other currencies. The pound also suffers from the gloomy mood in markets. In the recent dynamics, sterling is aligned with commodity currencies and not with the safe haven euro and yen.

GBPUSD down January 12 2016

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.