Pound Rises As U.K. Trade Deficit Hits 5-month Low
December 09 2016 - 12:24AM
RTTF2
The British pound strengthened against the other major
currencies in the European session on Friday, after the U.K.
visible trade deficit narrowed considerably to a 5-month low in
October.
Data from the Office for National Statistics showed that the
U.K.'s deficit on trade in goods fell to GBP 9.7 billion from GBP
13.8 billion in September. This was the lowest since May, when the
deficit was GBP 8.5 billion. Economists had forecast a shortfall of
GBP 11.8 billion.
This narrowing reflected a GBP 2.1 billion increase in exports
to GBP 26.8 billion and a GBP 2.0 billion decrease in imports to
GBP 36.5 billion.
At the same time, the balance of trade in services decreased to
GBP 7.7 billion from GBP 8 billion. As a result, the total trade
deficit fell to GBP 2 billion from GBP 5.8 billion in
September.
Meanwhile, the U.K. construction output dropped 0.6 percent in
October from September, when it climbed by revised 0.9 percent.
Output was forecast to grow 0.2 percent. On a yearly basis, growth
in construction output eased to 0.7 percent from 2.5 percent in
September. Economists had forecast a 0.1 percent fall.
In the Asian trading today, the pound held steady against its
major rivals.
In the European trading, the pound rose to a 3-day high of
0.8416 against the euro, from an early low of 0.8457. If the pound
extends its uptrend, it is likely to find resistance around the
0.81 region.
The pound advanced to 1.2619 against the U.S. dollar, 144.39
against the yen and 1.2819 against the Swiss franc, from early lows
of 1.2554, 143.34 and 1.2761, respectively. The pound may test
resistance around 1.28 against the greenback, 147.00 against the
yen and 1.29 against the franc.
Looking ahead, U.S. wholesale inventories data for October, U.S.
University of Michigan's preliminary consumer sentiment index for
December and U.S. Baker Hughes rig count data are set to be
published in the New York session.
At 8:00 am ET, European Commission President Jean-Claude
Juncker, European Parliament President Martin Schulz, Netherlands
Finance Minister and Eurogroup President Jeroen Dijsselbloem and
other officials are scheduled to speak at the 25th anniversary of
Maastricht Treaty, in Maastricht, Netherlands.
At 10:15 am ET, European Central Bank Executive Board Member
Benoit Coeure is expected to participate in a panel discussion on
"Policy Responses: Restoring Public Trust in Economic Reforms" at a
conference on "Challenges to More Sustainable and Inclusive Growth
in Europe", hosted by the Council of Europe Development Bank, in
Paris.
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