Anna 
In early European trading on Friday, EUR/GBP continued its downward trend for the second consecutive day, hovering around 0.8590. The decline in EUR/GBP was attributed to positive United States (US) production data.
Notably, the UK’s industrial sector displayed signs of recovery in November, according to data released by the Office for National Statistics (ONS) on Friday. Manufacturing output rose by 0.4% on a monthly basis, surpassing expectations of a 0.3% increase and reversing the previous month’s decline of 1.2%. Gross industrial production (monthly) met expectations at 0.3%, bouncing back from a 1.3% decrease in the prior reading. However, UK manufacturing production disappointed, rising at an annual rate of 1.3% in November, falling short of the anticipated 1.7%. Total industrial output also experienced a 0.1% decline during the same period, contrary to expectations for a 0.7% increase and marking a contrast with the previous month’s -0.5% drop.
Despite these positive figures, the UK trade balance revealed a deficit of £14.189 billion in November, beating expectations of a £15.7 billion deficit and improving from the £15.936 billion deficit recorded in the previous month. Traders are now turning their attention to the upcoming UK labor market data set to be released on Tuesday.
On the Euro front, the currency faced a decline, possibly influenced by comments from European Central Bank (ECB) President Christine Lagarde on Thursday. Lagarde suggested that the most challenging phase might be over, and the ECB would consider cutting interest rates if inflation dipped to 2.0%. She also noted that interest rates in the Eurozone had reached their peak following a rapid increase last year in response to high inflation.
Looking ahead, Eurozone manufacturing industrial production data for November is slated for release next Monday. Subsequently, market focus will shift towards German and European Monetary Union consumer inflation data on Tuesday and Wednesday, respectively.
