The Pound to US Dollar (GBP/USD) Exchange Rate continued to trade at a 4-month low on Friday despite stronger than expected UK GDP data and mixed economic data out of the world’s largest economy.
Mixed reports out of the US saw the ‘Greenback’ softened against the Canadian Dollar and other commodity and emerging market currencies but against the already weak Pound, it was little moved.
A report released by the Federal Reserve showed that US industrial production inched higher in July as the production of auto parts and vehicles climbed by 10.1%.
Overall industrial production advanced by 0.4% in July, unchanged from the previous months revised figure.
Manufacturing output meanwhile advanced by 1.0%, the largest increase seen since February and was far better than the 0.4% increase forecast by economists. Overall output has risen for six consecutive months. From a year ago, output climbed 5% in July, suggesting the economy is steadily but slowly gaining speed.
A report released by the Washington based Labour Department show that Wholesale prices in the US rose at a slower pace in July as fuel costs fell by their biggest margin in eight months.
The US Producer Price Index increased by 0.1% matching expectations. The volatile measure, which takes food and fuel out of the equation, rose by 0.2%.
‘Inflation is turning out to be less of a concern than we previously expected. Businesses are seeing a little bit of a relief as certain commodity prices come down and we have still yet to see upward pressure in broader services and wages,’ said a senior economist from Ameriprise Financial Inc.
Normally such data would see the ‘Greenback’ advance against its peers but alas, the publication of less positive data prevented gains.
The Thomson Reuters/ University of Michigan preliminary index of sentiment declined to its lowest figure since November, it dropped from July’s figure of 81.8 to 79.2 in August. Economists had been expecting an increase to 82.5.
Separately, the New York Federal Reserve said that its Empire State manufacturing index fell to a four-month low of 14.7 this month, from a reading of 25.6 in July, confounding expectations for a decline to 20.0.
Sterling was unable to make gains as the currency remained under pressure after the Bank of England cut its wage growth forecast by half and stated that wage growth will be a major factor in deciding when to raise interest rates.
As a result, the Pound is set to make a sixth weekly decline against the US Dollar, its longest losing streak in four years.
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,0.5991 ,
US Dollar,,Euro,0.7464 ,
US Dollar,,Canadian Dollar,1.0901 ,
US Dollar,,Australian Dollar,1.0751 ,
Pound Sterling,,US Dollar,1.6685 ,
Euro,,US Dollar,1.3387 ,
[/table]
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