UK Manufacturing Drags GBP Down

The pound has fallen against the dollar and the euro after official figures showed UK manufacturing output fell by 1.5% in January from the month before.

The drop came after a 0.9% rise in output in December, and has added to fears of a third recession since 2008.

The pound hit a new two-and-a-half-year low of $1.4832 against the US dollar. The euro also rose to a two week high versus the pound of 87.77 pence.

Separate data showed the goods trade deficit shrank in January.

The Office for National Statistics said the goods trade deficit was £8.195bn in January from £8.738bn in December. The goods trade deficit with non-EU countries also narrowed to £3.280bn from £4.169bn the month before.

Both the trade deficit figures were at their lowest since July. However, while the trade gap is shrinking the figures show that total exports in goods decreased by £900m, or 3.5%, to £24.4bn, as total imports fell by £1.4bn or 4.2% to £32.6bn.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza