The Great Britain pound traded lower ahead of Bank of England policy meeting that will occur later today. The reason for the currency’s drop was the streak of rather weak macroeconomic indicators.
UK industrial production fell 0.5% in March from February, a bit more than analysts had predicted (0.4%). Manufacturing production declined 0.6%, also more than was forecast (0.2%). Construction output was also down in March, falling 0.7% instead of rising by 0.3% as experts had promised. Britain’s trade deficit widened by £2.3 billion to £4.9 billion. The only decent indicator was the house price balance reported by Royal Institution of Chartered Surveyors, which showed the same 22% reading in April as in March while forecasters had predicted a drop to 20%.
Now, market participants wait for the BoE policy announcement scheduled for 11:00 GMT today. While no changes to the policy are expected, comments on the future plans may be important. Investors are concerned that BoE Governor Mark Carney may voice the same pessimism for the economy in 2017 as he did for 2016 (even though those predictions did not materialize).
GBP/USD declined from 1.2936 to 1.2917 as of 9:47 GMT today. EUR/GBP advanced from 0.8399 to 0.8414, touching the high of 0.8428 intraday. GBP/JPY slid from 147.80 to 147.41.
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