The British pound today dropped slightly against the US dollar following a deluge of mixed releases from the UK docket including the crucial manufacturing production data. The GBP/USD’s decline was further accelerated by profit taking as most traders closed their trades following the currency pair’s massive rally, which started on Friday last week.
The GBP/USD currency pair declined from a high of 1.4223 in the early European session to a trade at a low of 1.4181 at the time of writing.
The weak manufacturing data released by the Office for National Statistics contributed to the pair’s decline as the UK manufacturing production declined by 0.2% as compared to the expected 0.2% expansion. Furthermore, the UK’s industrial production also grew by a paltry 0.1% in February, which was much lower than the expected 0.4% growth rate. Britain’s construction output also declined by 1.6% in February, which was a major deviation from the expected 0.7% expansion. These disappointing economic releases were the main drivers behind the pound’s decline.
The release of the UK’s trade balance data for February limited the pair’s decline as the country’s trade deficit came in at £10.20 billion, which was much lower than last month’s £12.23 billion deficit, and also lower than the expected £11.90 billion deficit. The NIESR GDP growth estimate released later in the session also contributed to the pair’s decline as it was recorded at 0.2% versus the expected 0.3% GDP growth.
The currency pair’s short-term performance is likely to be influenced by the release of the US CPI data and the latest FOMC minutes, both scheduled for later today.
The GBP/USD currency pair was trading at 1.4175 as at 11:48 GMT having declined from a high of 1.4223. The GBP/JPY currency pair was trading at 151.38 having dropped from a high of 152.25.
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