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British pound rally losing steam as data disappoints

British pound daily update

BY DEB SHAW | 

British pound daily update

Pound sterling is slightly higher today. The British pound is currently strengthening against all major currencies, and is the strongest against the Australian dollar, the Japanese yen and the US dollar. Yesterday, the pound started the day fairly strong. Following lower-than-expected manufacturing and industrial production figures, the currency gave up a lot of its gains. Looking at GBP/USD, the pair is making another attempt at 1.42 today. 

Looking at the latest news and events, the RICS housing price balance for March missed estimates. Property prices in London and the Southeast are currently falling while other areas of the country continue to do well. While recent economic data from the UK has been better than expected, the country's property sector remains relatively weak. The likelihood of another rate hike in May is also hurting the real estate market. Our short-term and medium-term outlook on the pound remains bullish

GBP/USD is currently above 1.4190. EUR/GBP is down, with the exchange rate above 0.8710. The pound is up against the Australian dollar and up against the Canadian dollar. GBP/AUD is currently above 1.830, while GBP/CAD is above 1.7860.

This is a fairly light week for economic data relating to the British pound. BRC retail sales (1.4% vs. -0.1% expected) were ahead of expectations. February industrial production (2.2% vs. 2.9% expected) and February manufacturing production (2.5% vs. 3.3% expected) missed expectations by a wide margin. The February goods trade balance (-£10.200b vs. -£11.950b) was ahead of expectations. MPC member Broadbent did not address monetary policy. Later today, we'll see the BoE credit conditions survey. Last week, services PMIs missed expectations by a significant margin. 

Updated 
Short term outlook
Bearish
Medium term outlook
Bearish

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