Money Pound spikes against dollar as positive economic data counters Brexit impasse

13:21  11 october  2017
13:21  11 october  2017 Source:   International Business Times

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Positive UK macroeconomic data countered the effects of the ongoing Brexit talks impasse between London and Brussels to send the pound higher versus the dollar on Tuesday (10 October).

Pound spikes against dollar as positive economic data counters Brexit impasse . Britain's tourist boom continues as almost 40 million overseas visitors arrive in the UK. Pound 's slump in the wake of the Brexit referendum has made Britain a

British pound sterling street © Reuters British pound sterling street

Positive UK macroeconomic data countered the effects of the ongoing Brexit talks impasse between London and Brussels to send the pound higher versus the dollar on Tuesday (10 October).

At 3:37pm BST, the British currency was up 0.40% versus the dollar changing hands at $1.3194, thereby recovering some of the ground it lost in the wake of Prime Minister Theresa May's political woes and the increasingly entrenched positions of her Government and the European Union on the subject of the UK's divorce bill upon leaving the EU.

A raft of strong economic data aided the pound intraday. Earlier in the session, figures from the Office for National Statistics showed industrial production was 0.2% higher in August from the previous month, while construction rose 0.6% during the same period.

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Pound spikes against dollar as positive economic data counters Brexit impasse . Britain's tourist boom continues as almost 40 million overseas visitors arrive in the UK. Pound 's slump in the wake of the Brexit referendum has made Britain a

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Meanwhile, the British Retail Consortium noted that same-store retail sales were up 1.9% in September on the same month last year.

Fawad Razaqzada, technical analyst at Forex.com, said the pound's stormy comes after a sharp drop at the end of last week. "At this stage, one has to take this latest rebound with a pinch of salt, as it could be a counter trend move which could ultimately fail to sustain itself. However, the positive data has again boosted expectations for a rate increase from the Bank of England."

"There are no more UK economic data scheduled for release this week, so any further data-driven moves in the cable may be prompted by US data, with CPI and retail sales on Friday being the most obvious trigger. Only a potential break back above $1.3250 would be deemed bullish at this stage."

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Meanwhile, market sentiment in wake of positive data also enabled the pound to cut its losses against euro; down 0.13% to €1.1176, with the eurozone currency battling its own negativity over the political situation in Spain, with many fearing Catalonia might be about to declare independence to from Madrid, much to the chagrin of the Spanish government.

The pound was also broadly flat against the Swiss franc and Canadian dollar changing hands at CHF1.2861 and CAD$1.6492 respectively.

Mihir Kapadia, founder of Sun Global Investments, said cautious intraday optimism was merited. "The pound has endured a rough few weeks, especially in response to the political chaos in the country. But with reports emerging of a cabinet reshuffle, Prime Minister May could use this opportunity to exert her leadership. We expect the currency to react positively to this."

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A report by the think tank paints a worrying picture for the UK’s future generations.While wealth inequality was on the decline throughout most of the 20th century, it is now on the increase and is worsening due to an uneven housing market, according to a report compiled by left-leaning think tank the Institute for Public Policy Research (IPPR) and commissioned by Channel 5.

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