GBPUSD Movement
For the 24 hours to 23:00 GMT, GBP fell 0.26% against the USD and closed at 1.5990, as global growth concerns continued to dampen investor confidence, while weak UK economic data also weighed.
The IMF indicated that the UK economy would contract by 0.4% in 2012 before recovering to 1.1% growth in 2013, compared to its July forecast for 0.2% growth this year and 1.4% growth in 2013.
On the economic front, manufacturing production in the UK declined 1.1% (MoM) in August, against the expectations for a 0.6% decline and compared to a revised 3.1% rise in the previous month. Meanwhile, industrial production fell 0.5% (MoM) in August, in line with expectations and compared to a 2.9% rise in July. Moreover, the visible trade deficit widened to £9.8 billion in August, from £7.3 billion in July. Additionally, exports of goods dropped 4.0% (MoM) to £24.6 billion in August, whereas imports increased 4.5% to £34.5 billion in August. Moreover, the National Institute of Economic and Social Research’s September growth estimate rose to 0.8% (QoQ) in the three months ended September, from 0.1% (QoQ) in the three months ended August.
Separately, the Bank of England Governor, Mervyn King stated that monetary policy cannot prop up Britain’s economy forever, and export-driven growth would be hard to achieve at a time when much of the rest of the world is pursuing the same strategy.
In the Asian session, at GMT0300, the pair is trading at 1.5989, with the GBP trading marginally lower from yesterday’s close.
The pair is expected to find support at 1.5962, and a fall through could take it to the next support level of 1.5934. The pair is expected to find its first resistance at 1.6032, and a rise through could take it to the next resistance level of 1.6074.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
