The GBP dropped like a rock yesterday as weak economic data dragged the GBP/USD closer to the 1.6000 mark.
Manufacturing production recorded a 0.5% slump, against the expected 0.1% uptick.
Industrial production was down by 0.6% even when economists expected a 0.2% increase.
On a brighter note, the
GDP estimate, which is reported by the National Institute of Social and Economic Research or NIESR, forecasts that economic activity will shrink by 0.4% in the second quarter of the year after contracting by 1.3% in the first quarter. Additionally, NIESR noted that the economy is "stagnating" instead of contracting. This may support the call for further
quantitative easing when the
BOE meets this Thursday. If the central bank does expand its quantitative easing efforts, then we may see the GBP/USD reach or even pierce below the 1.6000 handle.
For today,
Nationwide consumer confidence was just reported to have climbed from 54 to 58, beating the consensus at 55. This implies that consumers are hopeful that, despite the recent downturn in production, the economic situation in the next six months will improve. Halifax housing price index is due at 9:00am GMT. House prices are projected to hold steady in June, after posting a 2.6% increase in May.