FX round-up: Pound slips after weak industrial production data for October
By Alexander Bueso
Date: Wednesday 07 Dec 2016
(ShareCast News) - A considerably weaker-than-expected reading on UK industrial production weighed on Sterling.
Industrial output fell by 1.3% month-on-month in October (consensus: 0.2%), as production in mining and quarrying sector shrank 8.6% and factory activity declined by 0.9% (consensus: 0.2%).
Against the US dollar and as of 1710 GMT the pound was off by 0.56% to 1.2604.
"As we enter the first half of 2017, when it is anticipated that Article 50 will be triggered, we expect firms to become more cautious in light of a lack of clarity regarding Britain's negotiation strategy and the aimed for post-exit relationship between the UK and the EU and the rest of the world," Andrzej Szczepaniak and Fabrice Montagne at Barclays Research wrote in a research note sent to clients.
In parallel, euro/dollar was edging higher by 0.29% to 1.0751 ahead of the European Central Bank's policy meeting the next day.
On a related note, in an interview with Market News International former Cypriot ECB governing council member Panicos Demetriades urged Frankfurt to act swiftly to shore up Italy's banking system.
Dollar/yen retreated 0.36% to 113.62.
The Aussie edged up by 0.25% to 0.7477 against the US dollar with traders quickly brushing off data published early on Wednesday showing that Australia's gross domestic product shrank at a 0.5% quarter-on-quarter clip over the three months to September.
That was a far worse outcome than the 0.1% drop which economists had projected, as a result of adverse weather and the uncertainty around the most recent elections, but most observers were optimistic that the country's GDP would rebound in the last three months of 2016.
Against India's rupee the Greenback was lower by 0.39% to 67.64 after the Asian contry's monetary authority surprised markets by deciding not to cut rates at its policy meeting.
From a bird's eye view, the US dollar spot index was lower by 0.25% to 100.24.
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