Pound gains little on data, stocks sold
The UK’s manufacturing and industrial production data surprised on the upside in September. The trade deficit narrower more than expected during the same month. The UK’s deficit eased to 11’253 million pounds in September versus 12’800 expected by analysts; last month’s figure was revised lower from 13’245 to 12’350 million pounds.
Cable shortly traded above its 200-hour moving average (1.3160) posterior to the data release. The strong data could keep the GBPUSD above 1.3085 (November support), before next week’s inflation data, yet could hardly boost the hawkish Bank of England (BoE) expectations provided the Brexit uncertainties and slower growth expectations in the next two years.
The European Commission cut its UK growth forecast to 1.5% from 1.8% this year, and predicted 1.3% and 1.1% growth in 2018 and 2019 respectively. If the European Commission estimation is correct, the BoE will likely remain stuck in a low growth - high inflation loophole even after having raised the interest rate by 25 basis points at its last meeting.
On the other hand, Brexit talks are complicated and bear no fruit. Businesses involving big banks, become gradually impatient and could throw in the towel if there is no clarity regarding the post-Brexit operating conditions by early next year.
Click here to read the full article on LCG.com
The UK’s manufacturing and industrial production data surprised on the upside in September. The trade deficit narrower more than expected during the same month. The UK’s deficit eased to 11’253 million pounds in September versus 12’800 expected by analysts; last month’s figure was revised lower from 13’245 to 12’350 million pounds.
Cable shortly traded above its 200-hour moving average (1.3160) posterior to the data release. The strong data could keep the GBPUSD above 1.3085 (November support), before next week’s inflation data, yet could hardly boost the hawkish Bank of England (BoE) expectations provided the Brexit uncertainties and slower growth expectations in the next two years.
The European Commission cut its UK growth forecast to 1.5% from 1.8% this year, and predicted 1.3% and 1.1% growth in 2018 and 2019 respectively. If the European Commission estimation is correct, the BoE will likely remain stuck in a low growth - high inflation loophole even after having raised the interest rate by 25 basis points at its last meeting.
On the other hand, Brexit talks are complicated and bear no fruit. Businesses involving big banks, become gradually impatient and could throw in the towel if there is no clarity regarding the post-Brexit operating conditions by early next year.
Click here to read the full article on LCG.com