GBP Falls After Economic Indicators Soften

The pound has fallen sharply following data suggesting a sluggish economy.

Manufacturing output fell 1.4% in April, the biggest fall for nearly six years, according to the Office for National Statistics (ONS).
Another ONS report showed only a modest rebound in construction output, after a sharp contraction in March.



The pound fell three quarters of a cent after the data was released to $1.3350. Analysts say the data has eased pressure for a rise interest rates.

“This data could fuel Bank of England concerns and uncertainties over the economy and there can be very little doubt that the Monetary Policy Committee (MPC) will leave interest rates unchanged at their June meeting next week,” said Howard Archer, chief economic advisor to the EY ITEM Club.

“The data also makes an August interest rate hike by the Bank of England look a lot more questionable,” he added.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza