The British pound is at the centre of attention on Tuesday. After the release of weak industrial manufacturing data, the currency weakened against the US dollar by 120 points to 1.4414. The price strengthened below the psychological level of 1.4500 (rounded figure).
Industrial manufacturing in the UK was down sharply in November in comparison with that of October, thus confirming the slowing in growth for the UK economy in the final quarter of 2015.
The index for industrial manufacturing for the UK fell by 0.7% MoM and 0.9% YoY against October’s 0.1% MoM and 1.7% YoY (forecasted: 0.0% MoM, 1.7% YoY). Production in the manufacturing industry for the country fell by 0.4% MoM and -1.2% YoY against a previous -0.4% MoM and -0.2% YoY (forecasted 0.1% MoM, -0.8% YoY).
At 16:30 EET Mark Carney is set to speak. If we take a look at the weekly time period, we could well see a fall to the 1.4229 minimum of 16th May, 2010. From here we should expect to see a rebound, but not for long. The pound will remain under pressure for a time whilst the situation remains murky as to whether the UK will remain an EU member.
The euro has received support from the euro/pound cross after the British stats came out. Increased demand for the euro in the cross allowed the euro/dollar to stick at 1.0850. Support from the crosses was weak, so be prepared for a fall in the rate to 1.0800. Only a fall in American indices and a weakening of the yuan can stop the euro from falling against the dollar.
The US economic calendar this evening is pretty much empty, with just Fed members Fischer and Lacker speaking.