The Pound was trading lower on Wednesday after the results from several econometric studies were published.
Despite eye-opening gains in Manufacturing and Industrial Production, the Pound fell as the Trade Deficit widened further as the value of imports continued to outweigh those of exports.
This dismayed many economists expecting the trade gap to have closed due to Sterling weakness following Brexit, which would have been expected to increase demand for UK goods overseas.
The Trade Balance stood at -12.16bn in November, which was lower than the -11.20bn forecast and the -9.89bn previously.
“Worsening trade balance proving that the weaker pound does little to improve a net importer's account.
“A record increase in imports - and that's expensive whether you're an importer or exporter ( as the latter ships in raw materials in many cases to produce the finished article before shipping out),” commented Forexlive analyst Mike Patterson.
On a positive note, however, Manufacturing production in the U.K. rose sharply in November, rising by a seasonally adjusted 1.3% following a decline of 1.0% a month earlier, and well above expert’s predictions of 0.5%.
Manufacturing production rose at rate of 1.2% year-on-year, which was better than estimates for a gain of 0.4%, after declining at a rate of 0.5% in October.
Industrial production increased by a seasonally adjusted 2.1%, compared to forecasts for a gain of 0.8% and following a decline of 1.1% in the preceding month.
Despite the mixed data the Pound was down versus its major counterpart, trading at 1.2130, down -0.30% versus the Dollar; down -0.28% versus the Euro to 1.1512 and down by -0.06% versus the Yen to trade at 140.88 at the time of writing.
The Pound is expected to be vulnerable to further volatility this afternoon when Governor of the BOE Mark Carney gives his testimony to the Treasury Select Committee at 14.15 (GMT).
Markets are expecting some further insight on his thinking about future monetary policy at the testimony.
A press conference with Donald Trump at 16.00 may also cause some volatility for forex, especially cable and risk sensitive pairs.