GBP/USD Trades Higher on Upbeat UK Trade Balance Data

The GBP/USD currency pair today rallied slightly higher after the release of upbeat UK trade balance data by the Office for National Statistics. The pair opened the European session trading in negative territory, which was quickly reversed after the release of the positive UK manufacturing data.

The GBP/USD currency pair rallied by over 50 points from daily lows hit earlier in the session to hit a high of 1.3168 after the releases.

The release of the UK industrial production data in the early European session was one of the main drivers behind the currency pair’s rally. The industrial production data for September came in at 2.5% on annualized basis as opposed to the market consensus of 1.9%. The manufacturing production data also boosted the pound by coming in at 2.7% on an annualized basis, which was higher than the expected 2.4%. The overall trade balance figure for September was the biggest catalysts for the pair as it beat expectations. The UK’s total trade deficit (goods and services) narrowed by £0.7 billion between August and September 2017.

Despite the pair’s brief rally, the sentiment around the pound remains largely negative due to Brexit worries amid political scandals involving Theresa May‘s government. The negative data reported from the construction industry as construction output declined by 0.9%  also weighed heavily on the pair.

The currency pair’s short-term performance is likely to be affected by the release of the University of Michigan confidence index and political events in the UK.

The GBP/USD currency pair was trading at 1.3149 as at 11:05 GMT having recovered from a low of 1.3111 earlier today. The GBP/JPY currency pair was trading at 149.18 having risen from a daily low of 148.82.

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