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Pound Is Rising with U.K. Production

April 8, 2010 at 23:15 by Vladimir Vyun

Great Britain poundThe Great Britain pound rebounded against the U.S. dollar and the Japanese yen on the signs that the factory production in the U.K. surged in February by twice as much as the analysts predicted, to the highest since 2008, as the recent declines of the pound were helping the economy to recover.

Manufacturing output increased 1.3 percent compared to the month earlier and the index of the factory production jumped to 90.1, the highest level since December 2008. The pound declined earlier as the election polls left uncertainty about the strength of the winning party and its ability to deal with the budget deficit, helping the exporters and bolstering the economy. The yield on the benchmark two-year government bond declined today by 5 basis points to 1.159 percent.

Analysts say that, while the manufacturing and the economic recovery are growing in momentum, it is a long way before the production returns to its full strength and the economy fully recovers. Until then the manufactures may encounter harsh conditions and this year may be tough. The Bank of England kept its bond-purchase plan at 200 billion pounds ($304 billion) after the officials discussed today if the rebound is strong enough to continue.

GBP/USD closed at 1.5278 at April 8th after opening at 1.5239. GBP/JPY closed at 142.64 up from the opening price of 142.23. EUR/GBP traded near 0.8742

If you have any questions, comments, or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

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