British Manufacturing production fell by 0.7%. Early expectations stood on a small drop of only 0.1%. The wider figure of industrial production also fell by 0.7%, more than 0.3% that was expected.
Pound/dollar is ticking down after the publication, getting closer to 1.5633. GBP/USD floated around the 1.5633 line prior to the release, climbing up from lows seen yesterday. Support is found 1.5550. Serious resistance is at 1.5780.
For more levels, see the British pound forecast.
This drop in manufacturing joins the negative manufacturing PMIs seen in recent months. Purchasing managers’ indices have shown that manufacturing is contracting, while other sectors continue growing. While a drop was expected, it was expected to be smaller this time.
Earlier this week, services PMI exceeded expectations and continued showing nice growth. On the other hand, the BRC retail sales monitor dropped by 1.6%, reflecting a slowdown among consumers.
Tomorrow, the British Monetary Policy Committee will meet for its monthly rate decision. No change in policy is expected, yet some analysts see an expansion of the Asset Purchase Facility program – more pound printing.
