Pound Goes Higher Even with Bad Fundamentals

The Great Britain pound advanced today even as the fundamental reports were worse that the pessimistic forecasts. Market analysts are scratching their heads, but don’t expect that the trend of the pound would become positive.

According to the report of British Retail Consortium, the shop-price inflation fell to 2.0 percent in November from 2.1 percent in October. The index stands at the lowest level this year. Both industrial and manufacturing production dropped 0.7 percent in October from September, much more than even the pessimistic forecasts. So why the sterling is running up? It’s difficult to tell with certainty, but perhaps the reemergence of the concerns about the European debt situation again increased demand for the UK currency as a refuge.

GBP/USD was up from 1.5599 to 1.5707 and GBP/JPY rallied from 121.22 to 121.93 today as of 17:52 GMT.

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