The British Pound fell against the US dollar on Tuesday as a weak data release from the UK, helped push the pound lower in low volume trading.
With many investors positioning themselves for a December interest rate hike by the Federal Reserve, which would be the first since 2006, the dollar maintained a solid level of support amongst traders. Weak housing data from the US, which saw home sales drop 3.4%, was largely shrugged off by investors, choosing instead to focus on the next move by the Federal Reserve.
Meanwhile in the UK, CBI realized trades dropped unexpectedly last month. In a report released by the Confederation of British Industry it was revealed that CBI realized trades declined to 7, down from the 19 recorded in the preceding month. This month’s figures came as a big disappointment to traders after analysts had been expecting the CBI realized trades figures to increase to 25 for October.
The previous week had seen the GBP/USD finish on the back foot after two days of disappointing economic data from the UK, which harmed the market confidence in the recovery of the UK economy. Following Thursday’s far worse than expected UK retail sales data, the Office for National Statistics reported on Friday that UK public finances had hit their worst October deficit since 2009. The recent poor data release has heightened the focus on the upcoming speeches from Bank of England Governor Mark Carney and Chief Economist Andrew Haldane.
Figure: Daily chart for GBP/USD