Article by ForexTime
Cable edged lower following softer than expected UK production report, but continues to trade under pressure. The GBP/USD currency pair lost approximately 30 pips in making a low at 1.5350, since its close on Tuesday during the NY trading session at 1.5380. The exchange rate is hovering near the 200-day moving average and just above support near the 10-day moving average at 1.5320. Resistance is former support near an upward sloping trend lien at 1.5550.
Industrial production, unexpectedly contracted 0.4% month over month while rising by 0.8% year over year, down from 1.5% year over year in the previous month. Trade figures revealed that exports by value fell to GBP 2.3 billion from GBP 22.8 billion which was the lowest since September 2010. These data follow disappointing August PMI survey numbers, and signs that retail sales are slowing, together pointing to a tempering in economic activity. Q3 is likely to slow to 0.5% quarter over quarter from Q2’s 0.7%. This should in turn have a subduing impact on BoE tightening expectations.
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