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Forex - Sterling hits session lows after mixed U.K. data

Published 07/07/2015, 05:16 AM
Updated 07/07/2015, 05:16 AM
© Reuters.  Sterling hits session lows after mixed UK data as Greece fears weigh

© Reuters. Sterling hits session lows after mixed UK data as Greece fears weigh

Investing.com - The pound fell to session lows against the dollar on Tuesday after data showed that U.K. industrial output rose unexpectedly in May but manufacturing production fell and as heightened risk aversion bolstered dollar demand.

GBP/USD fell to lows of 1.5509, the weakest since June 15 from around 1.5530 ahead of the report.

The Office for National Statistics said industrial output rose 0.4% in May, compared to expectations for a decline of 0.2%.

Oil and gas output jumped 7.3% from April, the biggest increase in more than a year.

But the manufacturing sector remained weak, with output falling 0.6% after a 0.4% drop in April.

On a year-over-year basis, industrial output increased by 2.1%, the strongest annual growth since April of 2014, and manufacturing was up 1.0%.

Sterling was higher against the broadly weaker euro, with EUR/GBP down 0.16% to 0.7074 from 0.7069 earlier.

The single currency came under pressure ahead of a euro zone summit later in the day which it was hoped would restart negotiations between Greece and its lenders.

Greek Prime Minister Alexis Tsipras was to present new proposals to euro zone finance ministers, ahead of a meeting of European leaders to discuss the aftermath of Sunday’s referendum in Greece.

Greek banks were set to remain closed on Tuesday after capital controls were extended, amid concerns that lenders are close to running out of cash.

The European Central Bank announced Monday that it would keep its emergency liquidity assistance to Greece unchanged at levels announced last Monday.

The ECB also said it will adjust the haircuts on collateral accepted by the Bank of Greece as part of the ELA, adding to pressure on Athens.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.64% to 97.03, boosted by safe haven buying.

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