The British pound tumbled toward support at 1.9525 on Tuesday as UK industrial output contracted for the second month in a row and kept the annual rate down to -1.6 percent.
While energy and mining producers are keeping pace, manufacturers are clearly suffering as output has fallen negative in five of the past seven months. Looking ahead to tomorrow morning, we’ll see the release of BRC Shop Prices for the month of July, but given persistent price growth in the UK economy, there’s some upside potential for this report. However, I think that like the euro, the British pound may trade more based on anti-dollar sentiment. As a result, [B]my fundamental bias for the British pound on Wednesday is bullish[/B].