Pounds Heads Lower on Unfavorable Fundamental Indicators

The Great Britain pound edged down on the signs that the UK economy is slowing, possibly resulting in additional easing from the nation’s central bank. The pound bounced back a little today, but it’s likely to head down again as today’s fundamental reports are expected to be negative.
The value of the UK retail sales declined 1.6 percent year-over-year in November, according to the Retail Sales Monitor of British Retail Consortium. The Halifax house price index was down 0.9 percent in November from October, following the 1.2 percent increase in October from the previous month.
The reports were bad yesterday and analysts say that the fundamental data isn’t going to be much better tomorrow. The manufacturing production is expected to drop 0.1 percent, while the industrial production is forecast to shrink 0.3 percent.
The hopes for a resolution of the European crisis aren’t doing any good for the sterling. The UK currency was used as something like a safe haven from the European woes, but if that reason for buying the pound would disappear what would attract traders to the currency? The European Union has its summit that supports the hopes for the Eurozone and the euro, but Britain and its currency doesn’t have such a support.
GBP/USD was at about 1.5610 today as of 5:36 GMT after falling yesterday from 1.5649 to 1.5598. GBP/JPY traded at 121.33 on today’s trading session, following the drop from 121.75 to 121.23 on yesterday’s session. EUR/GBP rose yesterday from 0.8561 to 0.8588 and continued its advance today, climbing to 0.8595.

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