Poor Economic Data Force Pound To Recede In The Forex Market
By Antonis Vasloos
After a long time, Pound Sterling was gaining in the forex market. However, the high tide was short-lived after the economic data was released. The industrial production, trade and manufacturing output data was released during the morning trading session. The values were much less than the expectations and it shocked the investors.
The GBP/USD pair tumbled down to a new low while the EUR/GBP pair raised higher. In a nutshell, Pound lost against almost all the major international currencies. The FTSE 100 index showing the movement of London stocks increased for some time immediately after the fall of Sterling. However, the situation came under control in a few hours.
The UK economy was expected to be stronger especially as Britain is planning for tough Brexit negotiations. The economic data proved otherwise. The Bank of England showed some interest on easing the monetary policy following the lead of the US. Market experts worry that the BoE may change its course of action after looking at the poor economic data.
There is still hope for Pound investors because BoE won’t take drastic decisions after looking at just one economic data. The consumer price inflation numbers and average earning figures will be released soon. The BoE will consider all these information before deciding on the new monetary policy.
Market watchers, however, warn the weakness experienced by Pounds will more likely continue in the upcoming sessions. In the current market trend, Pound is expected to challenge the support instead of the resistance.