Just released were UK Manufacturing Production results. The number was 2.3% which compared to forecasts of 0.3%. The recovery in the UK manufacturing sector has been a pleasant surprise, as it has outperformed analyst expectations. During the global financial crisis, there were fears that output declines wouldn't return to the manufacturing sector, and would be grabbed by lower cost countries. Today's number continues in this trend and appears to indicate that manufacturing output and jobs are returning to the sector.
On the news, the GBPUSD moved to its highest level of the day as it jumped 35 pips to a high of 1.4886. It has since traded back towards 1.4850, but remains well above its 1.4770 lows that were set earlier in the morning. The Pound strength contrasts to the EURUSD which hasn't found any support in the day and has traded back below 1.2700.
Looking ahead, Forex traders will be awaiting tomorrow's Bank of England Inflation Report and UK Claimant Change numbers. Today's much better than expected manufacturing results may bode well for a rosy Claimant number tomorrow.