Investing.com - The pound fell to session lows against the dollar on Wednesday after data showing that U.K. industrial output unexpectedly fell in July and another report showing that the country’s trade deficit widened sharply.
GBP/USD was down 0.26% to 1.5355 from around 1.5398 ahead of the data.
The drop in the pound came after the Office for National Statistics said U.K. industrial production fell by 0.4% in July and rose just 0.8% from a year earlier.
Manufacturing production declined 0.8% in July, the largest drop since May 2014 and was 0.5% lower on a year-over-year basis.
The sharp drop came as output fell sharply at transport equipment makers and manufacturers of basic metals & metal products, the report said.
A separate report from the ONS showed that the U.K.’s trade gap widened sharply in July.
The deficit in goods widened to £11 billion, the largest shortfall since July 2014, as exports tumbled by almost 10%.
The weak data dampened expectations for higher U.K. interest rates.
Sterling was also lower against the euro, with EUR/GBP rising 0.19% to 0.7290.
The dollar remained broadly stronger as prospects of more economic stimulus by China bolstered risk appetite.
Japan’s Nikkei posted that largest one day percentage gain in seven years on Wednesday after China’s finance ministry said late Tuesday that it would implement fresh measures to stimulate economic growth.
Chinese equities rallied as the announcement alleviated concerns over slowing growth, driving broader gains in regional equity markets and in commodity markets.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last up 0.21% to 96.04.