Pound Falls Ahead Of U.K. Parliamentary Vote On Brexit; Weak U.K. Data Weighs
December 07 2016 - 1:06AM
RTTF2
The pound drifted lower against its major counterparts in the
early European deals on Wednesday, as the investors became cautious
ahead of U.K. Parliamentary vote on Brexit plan and as British
industrial and manufacturing output declined unexpectedly in
October.
The lower house of the Parliament is voting tonight on the
Brexit plan after the U.K. Prime Minister Theresa May agreed to
publish her plan for the exit process before Article 50 is
triggered.
The PM on Tuesday accepted the demand by the Labour PMs to
reveal Brexit plan on conditions that the Article 50 should be
triggered by the end of March and the outcome of the June
referendum should be accepted.
Figures from the Office for National Statistics showed that
industrial production declined 1.3 percent from September,
confounding expectations for an increase of 0.2 percent. Production
had decreased 0.4 percent in September.
At the same time, manufacturing output slid 0.9 percent,
reversing a 0.6 percent rise in September and a 0.2 percent
expected growth.
On a yearly basis, industrial production decreased 1.1 percent,
in contrast to a 0.4 percent rise in the prior month and 0.5
percent expected growth.
The currency has been falling in the Asian session.
The pound declined to a 5-day low of 1.2580 against the
greenback, from a high of 1.2683 hit at 6:15 pm ET. Continuation of
the pound-greenback downtrend may see it challenging support around
the 1.22 region.
The pound weakened to a 2-day low of 143.34 against the Japanese
yen, compared to Tuesday's closing value of 144.50. If the pound
extends decline, 141.00 is possibly seen as its next support
level.
Preliminary figures from the Cabinet Office showed that Japan's
leading index increased less-than-expected in October to the
highest level in nearly a year, Wednesday.
The leading index rose to 101.0 in October from 100.0 in the
previous month, Economists had expected the index to climb to
101.4.
The pound that closed Tuesday's trading at 1.2801 against the
Swiss franc dropped to a 5-day low of 1.2704. The next possible
support for the pound-franc pair is seen around the 1.22
region.
The pound slipped to a weekly low of 0.8523 against the euro,
compared to 0.8451 hit late New York Tuesday. Further weakness may
take the pound to a support around the 0.88 region.
Figures from Destatis showed that Germany's industrial
production recovered in October.
Industrial production grew 0.3 percent in October from
September, when it declined by revised 1.6 percent. Nonetheless,
the pace of growth was weaker than the expected 0.8 percent
increase.
Looking ahead, U.S. crude oil inventories data and consumer
credit for October are set to be published in the New York
session.
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