UK pound is heading higher against the euro today, even though it is down against its low-beta counterparts, the dollar and then yen. Economic divergence is one of the reasons that the pound is doing so well against the euro today.
The latest data to come out of the United Kingdom is manufacturing production. This measure rose by 0.1 per cent from July to August, according to the Office for National Statistics. Compare this to the latest data from Germany, which points to lower output.
With the divergence in economic data, the United Kingdom has the upper hand against the eurozone. However, the pound is still struggling against the US dollar and the Japanese yen. Even though the situation is improving in the United Kingdom, it’s still not improving as quickly as thing are improving in the United States.
Plus, the UK pound has a problem in terms of uncertainty. While the UK economy is doing well as compared to what’s happening in the eurozone, and while it’s recovering better than initially estimated, the reality is that the US economy is still recovering better.
At 10:33 GMT GBP/USD is down to 1.6049 from the open at 1.6083. EUR/GBP is down to 0.7842 from the open at 0.7868. GBP/JPY is down to 174.4860 from the open at 174.9550.
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