Pound touches five-year lows as downbeat data, worries about general election weigh

Pound touches five-year lows as downbeat data, worries about general election weigh

13 April 2015, 09:20
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On Monday the pound slid to fresh five-year lows against the dollar, as downbeat data on UK industrial production and jitters about May general election continued to weigh.

GBP/USD hit lows of 1.4566, the weakest since June 10, 2010 and was last at 1.4686, off 0.31% for the day.

Sterling was also weaker against the euro, with EUR/GBP rising 0.23% to 0.72.64.

Official figures released Friday indicated that U.K. industrial production edged up 0.1% in February, undershooting forecasts of a 0.4% gain. The smaller than expected increase in industrial output was due in large part to a 12% annual decline in oil and gas production - the biggest drop since August 2013.

The soft data spurred fears about the outlook for first quarter growth, sending sterling lower.

The British currency was already pressured amid concerns that the 7 May election will result in a hung parliament.

Demand for the greenback continued to be supported by expectations for higher interest rates, as investors regained confidence that the U.S. economy would continue to recover after recent economic reports pointed to a slowdown at the start of the year.

Last week several officials, including the presidents of the New York and Richmond Federal Reserve banks made the case for the Fed to begin policy tightening as early as the summer.

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