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