The British Pound Sterling was on Wednesday, December 7, the worst-performing currency in the G10 through the mid-week session as a result of the release of some poor economic data.
The GBP slid as much as 0.8 percent to hit a one-week low of 85.255 pence against the euro EURGBP= after data showed British industrial output suffered its biggest monthly fall in more than four years.
Indications have emerged that the decline in the Pound was driven by the surge in UK bond prices – bonds and stock markets.
The rising bond prices mean yields delivered by those bonds are falling and it is the strong rise in US and UK yields since the election of Donald Trump in early November that has been the linchpin of Sterling’s recent outperformance.
However the pressure was compounded mid-morning on news that UK manufacturing production data had fallen 0.9% on a month-on-month in October. This is much worse than the 0.2% growth that economists were forecasting.
