The Pound soared today, as optimistic manufacturing data from Britain gave support to the British currency. According to the Office for National Statistics (ONS), British Manufacturing Production rose 0.9pc in July in comparison to June. This was the biggest increase since the January 2008. Moreover, analysts forecasted a moderate increase of 0.3%. As a result, in Tuesday’s trading the GBP/USD hit as high as 1.6587. However, the pair is now higher for the day by about 170 pips at the 1.6519 level.
Today’s data is further evidence that the British economy is continuing to rise out of recession. Additionally, many figures from Britain lately have even surpassed economist’s predictions. It is important to note that the GBP’s strength vs. the Dollar today was also owed to bullish Crude Oil, bullish Gold and other bullish precious metals putting additional downward pressure on the USD. Furthermore, in some case, the forex market may have acted slightly irregularly today, due to yesterday being the Labor Day bank holiday in both the U.S. and Canada.
Looking ahead to this week, further positive data is likely to lend a hand to the British Pound. On Wednesday, the Halifax HPI is set to be vital in determining the health of the British housing sector. On Thursday, there is the Asset Purchase Facility, MPC Rate Statement, and Official Rate Statement all at 11:00 GMT. On Friday, there is the pivotal release of the PPI Input at 08:30 GMT. These publications this week will be crucial in determining the strength of the GBP for September.
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