2016.09.0706:20:00UTC+00Pound Falls After Weak U.K. Manufacturing Data

The British pound weakened against the other major currencies in the European session on Wednesday, after data showed that U.K. manufacturing output dropped more-than-expected in July, the aftermath of the U.K. vote to leave the European Union.

Data from the National Bureau of Statistics showed that U.K. manufacturing output contracted from June, falling 0.9 percent. Economists had forecast manufacturing to drop moderately by 0.3 percent.

Meanwhile, industrial output gained 0.1 percent month-on-month in July after staying flat in June. Nonetheless, the monthly growth was in contrast to a 0.2 percent fall economists had expected.

Annual growth in industrial production improved to 2.1 percent in July from 1.4 percent previous month. This was the fastest growth in three months and better than the expected increase of 1.9 percent.

Manufacturing output climbed 0.8 percent, following a 0.6 percent rise in June. Output was expected to climb 1.7 percent.

In other economic news, data from the mortgage lender Halifax showed that British house price inflation eased at a faster-than-expected pace in August to the lowest level in nearly three years. House prices climbed 6.9 percent in three months to August from last year after rising 8.4 percent in the three months ended July. Economists had expected the inflation to slow to 7.0 percent.

On a monthly basis, house prices edged down 0.2 percent from July, when it dropped by 1.1 percent. It was the second successive monthly fall. The expected decrease for the month was only 0.1 percent.

In the Asian trading today, the pound showed mixed trading against its major rivals. While the pound fell against the yen, it held steady against the U.S. dollar, the Swiss franc and the pound.

In the European trading, the pound fell to 6-day lows of 1.2955 against the Swiss franc and 135.82 against the yen, from early highs of 1.3031 and 137.12, respectively. If the pound extends its downtrend, it is likely to find support around 1.25 against the franc and 130.00 against the yen.

Against the euro, the pound dropped to a 5-day low of 0.8408 from an early high of 0.8372. The pound may test support near the 0.87 region.

The pound edged down to 1.3369 against the U.S. dollar, from an early high of 1.3437. The pound is likely to find support around the 1.29 region.

Looking ahead, Canada Ivey's purchasing managers' index for August is set to be published in the New York session.

At 9:15 am ET, Bank of England Governor Mark Carney and other policymakers Jon Cunliffe, Kristin Forbes and Gertjan Vlieghe are set to attend Treasury Select Committee hearing.

The Bank of Canada will announce its interest rate decision at 10:00 am ET. Economists expect the bank to retain interest rates unchanged at 0.50 percent.

At 10:00 am ET, Federal Reserve Bank of Kansas City President Esther George will testify on monetary policy and trade before the Financial Services sub-committee in Washington DC.

At 2:00 pm ET, U.S. Federal Reserve is due to release the Beige Book report.