The Pound was little moved against the US Dollar but edged higher against the Euro on Friday following the release of mixed economic data out of the UK and as investors focus on US employment data due for release later in the session.
Official data released by the Office for National Statistics showed manufacturing production increased by 0.3% in December, less than the 0.6% increase expected by economists. Production in November was revised downward to -0.1% from the previous stagnant figure of 0%. Industrial production figures also came in below expectations, casting some doubt over the pace of the UK’s economic recovery.
The production data was offset by a separate report which showed that the U.K’s trade deficit narrowed to £7.7 billion in December, compared to expectations for a deficit of £9.3 billion. The trade deficit in November was revised to £9.8 billion from a previously estimated deficit of £9.4 billion. The £1 billion fall was the sharpest narrowing since records began in 1998. The narrowing comes following an increase in exports to the European Union.
Sterling gained against the Euro after the single currency came under pressure due to Germany’s top court referring a claim to the European Court that the European Central Bank overstepped its mandate in bailing out debt ridden member nations.
“It’s a clear Euro negative if you’re questioning the whole legality of the existing framework of the programme. The Programme has had a material effect in lowering the risk premia in European assets, which had supported the Euro,” said a currency strategist at SEB AB.
All eyes will now be focused on this afternoons US non-farm payrolls data which is expected to come in positively.
Pound (GBP) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,US Dollar,1.6334 ,
Pound Sterling,,Euro,1.2036 ,
Pound Sterling,,Australian Dollar,1.8258 ,
Pound Sterling,,Canadian Dollar,1.8077 ,
[/table]
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