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Analysis

The Pound is falling – who’s to blame? Overview for 11.02.2022

GBPUSD remained volatile and got under pressure on Friday. 

The British Pound is falling against the USD on Friday. The current quote for the instrument is 1.3552.

The United Kingdom released a lot of macroeconomic reports today and investor…

GBPUSD remained volatile and got under pressure on Friday. 

The British Pound is falling against the USD on Friday. The current quote for the instrument is 1.3552.

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The United Kingdom released a lot of macroeconomic reports today and investors had no choice but respond. 

The British GDP in December 2021 dropped 0.2% m/m after adding 0.9% m/m in November. It’s bad but the expected reading was even worse, -0.5% m/m. On QoQ, the preliminary GDP report showed 1.0% in the fourth quarter against the expected reading of 1.1% – may be due to the weak December number. 

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The Industrial Production in the UK added 0.3% m/m in December, better than expected but still behind the November reading (1.0% m/m). The Construction Output expanded by 2.0% m/m after adding 1.9% the month before and against the expected reading of -0.6% m/m. The Manufacturing Production increased by 0.2% m/m after expanding by 1.1% in November. 

The production parameters are rather unstable, probably due to vague prospects with regard to the pandemic. In December, it was still unclear when London would remove social restrictions. Now, with the restrictions removed, the statistics for January is expected to be rather neutral, while the February report may show positive numbers. 

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The Pound enthusiasts may try to find support in this data, although it wasn’t significantly strong. The key aspect that is against the Pound right now is the local strengthening of the American currency. 
 

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