The Pound had a mixed day on Friday after data showed UK industrial production barely rose in February as an increase in manufacturing output was offset by a drop in oil and gas. Total production gained 0.1 percent as energy output declined 3.8 percent. An increase of 0.3 percent had been forecast by economists. Manufacturing rose 0.4 percent amid higher car output. The figures suggest the industrial sector faltered in the first quarter, with output in the three months through February rising just 0.2 percent. An increase of 0.4 percent will be needed in March to keep production at the level seen in the fourth quarter. Seven of 13 manufacturing sectors posted gains in February, with transport equipment, machinery and metals increasing the most. Recent economic surveys have been mixed. While analysts suggest growth may have accelerated to 0.7 percent from 0.6 percent, British Chambers of Commerce said Thursday the U.K. lost momentum across all sectors of the economy.
The Dollar gained across the board last week, this was compounded on Friday after Federal Reserve Bank of Richmond President Jeffrey Lacker reiterated that he sees a strong case for the Fed to begin raising short-term interest rates this summer. “I expect that, unless incoming economic reports diverge substantially from projections, the case for raising rates will remain strong at the June meeting,” Mr. Lacker said.
The Fed has held its benchmark federal funds rate near zero since December 2008 to stimulate spending and the broader economy. Most officials at the central bank expect to begin raising rates sometime this year, though the precise timing of the first rate increase remains uncertain.
Mr. Lacker, who is a voting member this year of the rate-setting Federal Open Market Committee, has been a longtime skeptic of the Fed’s easy-money policies. He has repeatedly signaled that he favors raising rates at the June 16-17 policy meeting. He said Friday that he is “confident” sluggish U.S. inflation will pick up toward the Fed’s 2% annual target over time and said the jobs market now is “well within the confidence bands of any reasonable estimate of ‘maximum employment’,” which is one of the Fed’s mandated goals, along with stable prices.
There are no major announcements today.
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