It got crazy in the U.K. yesterday, and no, I’m not just talking about the riots. The pound took a backseat against most of its counterparts yesterday on mixed economic data from the U.K. and risk aversion in markets. GBP/USD went down by 124 pips to 1.6341, while EUR/GBP slipped back by 54 pips to .8696.
Too bad the U.K. economic reports weren’t enough to save the pound. As we’ve seen yesterday, the BRC retail sales monitor gained by 0.6% in July after falling by the same rate in June. Meanwhile, the RICS house price balance showed another 22% decline in July.
Employment outlook in the country also weakened in the same month, which might’ve been the straw that broke the camel’s back and motivated traders to sell the pound like there’s no tomorrow. As bad as the situation is for the U.K., it could be worse. Heck, the pound still gained against the euro!
Will the pound bulls hustle some muscle in the charts today? The U.K. is set to release its manufacturing production report today at 8:30 am GMT, which is around the time the country’s trade balance and industrial production report will also be released. If the report prints worse than market geeks had priced in, then we just might see the pound drop faster than you can say “KABLAM!”