GBP/USD down to 1.5960 as Production Drops

The pound slumped to a three-week low against the dollar after a government report showed industrial production declined in August, casting doubt on the strength of the economy in the third quarter.

The U.K. currency weakened at least 0.2 percent versus all of its 16 major counterparts as separate data showed the goods-trade deficit improved less than economists forecast. U.K. government bonds rose for a third day. Economists predict the Bank of England will keep its benchmark interest rate at a record low when it announces its policy decision tomorrow.

“There’s a sense of disappointment in today’s data, which has weighed on the pound,” said Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “The pace of economic recovery in the U.K. may prove slightly less robust than anticipated.”


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