The Pound briefly climbed to its highest level since November 2009 on Friday after data showed that industrial production in the world’s largest economy fell more than forecast, raising concerns that the USA’s economic recovery is slowing.
Figures released by the Federal Reserve showed that factory production in the US fell by its biggest level since May 2009. Industrial production declined by 0.3% and manufacturing production fell by 0.8% as severe winter weather battered the country. Economists are expecting output to pick up once the weather passes.
“We feel pretty confident that manufacturing will pick up given that fundamentals look promising. If demand does pick up, then there is a good chance that firms will need to pick up their pace of production,” said a senior economist.
The US Dollar is likely to fall further against its most traded peers if a consumer sentiment index comes in worse than the fall forecast by economists.
The Pound remained supported after the BoE raised its U.K. economic growth forecast for 2014 to 3.4% from 2.8% on Wednesday. The bank also updated its forward guidance on bank rates, saying it will not raise rates until the spare capacity in the
U.K. economy has been fully absorbed, which it does not see happening until 2015.
Sterling also received support from construction output data which supported the view that the UK economy continues to strengthen.
Against the Euro the ‘Greenback’ was trading close to a three-week low after Eurozone GDP came in stronger than expected.
US Dollar (USD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,
,Pound Sterling,0.5983 ,
US Dollar,,Euro,0.7301 ,
US Dollar,,Canadian Dollar,1.0979 ,
US Dollar,,Australian Dollar,1.1073 ,
Pound Sterling,,US Dollar,1.6714 ,
[/table]
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