This morning’s 9:30AM release of UK Manufacturing Production
m/m (1.0%) was the highest increase in manufacturing output since November
2013 (1.2%). This shows that the UK economy is churning back to life in the New
Year after the winter months and a revival natural-gas production in February
has reportedly helped that along. GBP/EUR is up 0.45% on the day, GBP/USD is up
0.84% on the day, and Sterling has rallied against other currencies across the
board for a sustained rate rise throughout the day after the figures this
morning. This has increased optimism that the UK is poised for a strong GDP figure
for the first quarter of the year and brightened the economic outlook.
Also, the IMF predicted today that the UK will have
the fastest growth (2.9% y/y) of the leading G7 economies this year. The UK did
not have a completely clean bill of health as the IMF accused the UK of an “unbalanced”
recovery with greatly expanded mortgage lending and easier credit conditions. However,
for the time being, the overall outlook of the UK is very positive, resulting
in a strong pound.
Nicholas Ebisch
Corporate Account Manager
Caxton FX
