Pound sees gains on factory data

Pound sees gains on factory data

Story link: Pound sees gains on factory data

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The pound saw gains Tuesday after an unexpectedly large rise in U.K. factory output in July while at the same time Germany's industrial production dropped by 0.9 percent in July from June when analysts had predicted that Germany's output would rise by 1.6 percent in July.

Factory output in the U.K. was up 0.9 percent in July after it was forecast to rise by only 0.3 percent in the month.

Additionally, the British currency rose and then gave back part of its gains by early afternoon in New York ahead of this week's meeting of the Bank of England's Monetary Policy Committee, where the Bank is expected to hold interest rates at 0.5 percent and not add any more money to the Bank's program to purchase assets to help out the economy.

At just before 12:30 in New York the pound traded at 87.81p to the euro while it took $1.6523 to buy a pound.

The Japanese yen gained after fewer corporate bankruptcies were reported there, with 1 percent fewer of the bankruptcies filed in August from the same month last year.

The yen was also up on the possibility that the Democratic Party of Japan will not intervene to weaken the yen after it takes over power on 16 September.

Meanwhile, the US dollar declined versus the yen and the euro on gains in equities markets, which increased investor confidence and sent them looking for riskier deals.

In early afternoon trade in New York, the yen traded at 92.175 to the US dollar and at 133.742 to the euro while it took $1.451 to buy a euro.

The Australian dollar also gained on the greenback, trading at 86.38 cents US to the Aussie on speculation that investors will be looking for more carry trades.