Rates dropped from a high of $1.6154 to $1.6035 as euro-zone factory output fell again for the month of November, the decline is the third consecutive month and comes despite predictions of a rise.
Tuesday could see further movements as the UK data releases come thick and fast. Tomorrow we will see Retail and Producer Price index (RPI and PPI) along with Consumer Price Index (CPI) for December. This will give another indication to whether the UK economy contracted in Q4 of 2012 and could fuel speculation that further stimulus is needed from the Bank of England (BoE).Most forecasts show they are expecting a rise in figures from November but following Fridays surprise negative GDP estimate the door is open for further declines.
Over in the states some analysts believe the U.S economy could be on the up, last week saw the U.S trade deficit widen as imports of consumer goods increased unexpectedly in November. Import of goods increased by $4.6 billion and could be a sign that the U.S retail sector is growing and that spending is increasing.
As mentioned in previous posts there seems to be a fair amount of focus on the UK at the moment and a run of poor data tomorrow and over the course of the week could well see GBP/USD rates drop back below $1.60.
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