Manufacturing production rose by only 0.1%, weaker than 0.3% that was expected. In addition, last month’s drop was revised down from -1.1% to -1.2%. The UK also reported a drop of 1.7% in industrial production, nearly 3 times the expectations for a slide of 0.6%, and even more than last month’s drop of 0.5%.
GBP/USD remains denied of the 1.60 level.
Cable now trades at 1.5974. It already got closer to 1.60 earlier in the day, but couldn’t hold up. It fell to 1.5962 but now recovers.
The Bank of England is expected to leave policy unchanged this week, but an expansion of the QE program cannot be ruled out. As aforementioned, there is a growing notion that the impressive GDP growth of 1% in Q3 was a one time event and doesn’t represent a new course for the British economy, as the whole world is in a slowdown.
For more on the pound, see the GBPUSD forecast.
The elections in the US are the next big event: see how to trade the elections with EUR/USD.
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