The British Pound headed for the first weekly decline since May as the latest economic releases pointed to the possibility that the U.K. economy could be slowing down. The Sterling traded lower against the majority of its Forex counterparts.
Economy Could Be Slowing
Foreign exchange trading reports show that the British Pound weakened against the majority of its peers in the last week following the release of key economic fundamentals, such as industrial production, which suggested that the U.K.’s economy could be losing momentum. In addition to lackluster industrial production news, domestic announcements revealed that activities in the construction sector fell 1.1 percent in the month of May, home prices did not rise as much as predicted, and the nation’s trade deficit expanded. The Sterling dipped against the U.S. Dollar after the U.S. Department of Labor said that the number of persons who filed for unemployment benefits fell by 11,000 in the week that ended on July 5th. The data boosted demand for the greenback somewhat, a day after the release of the monetary policy meeting minutes disappointed investors by failing to offer clues on the timing for a cash rate hike.
Aussie Dips On China Comments
The Australian Dollar fell against the greenback after China’s Finance Minister, Lou Jiwei, indicated that the nation is not contemplating further stimulus measures, and will leave it to the U.S. to bolster the global economies. Chinese officials mentioned that the government appears to be satisfied with a growth percentage below 7.5 percent for the year, as long as the employment sector continues to create payrolls at a high rate. The Aussie remained under pressure in Forex trading following news showing that the unemployment rate reached 6.0 percent last month, even as the economy saw the creation of 16,000 jobs.
Disappointment Drives Euro Down
The Euro rate weakened against the greenback as the recent string of reports out of the Euro region point to the likelihood that the banking sectors of different countries could be in trouble. This frightened Forex currency traders who responded by opting for safe havens. On the data front, the E.U. showed that Italian industrial production dropped 1.2 percent in May, while economists thought it would go up 0.2 percent. Furthermore, France announced that its industrial output plummeted 1.7 percent in May, missing forecasts for a 0.2 percent hike. The brewing bank troubles weighed on sentiment, and increased concerns that another sovereign debt crisis could be starting. Sources say that speculators area waiting to see how the central bank reacts to these issues.