Pound Slides Amid Risk Aversion
April 29 2016 - 1:11AM
RTTF2
The British pound weakened against the other major currencies in
the early European session on Friday amid risk aversion, after U.S.
shares fell the most in three weeks overnight on the back of
disappointing data and weak corporate earnings.
The U.K.'s FTSE 100 index is currently down 0.87 percent or
55.11 points at 6,267, France's CAC 40 index is down 0.28 percent
or 71.31 points at 4,486 and Germany's DAX is down 1.31 percent or
134.85 points at 10,186.
Oil prices dropped on the back of a weak dollar in the wake of a
disappointing report on U.S. first-quarter GDP growth.
In other economic news, data from the Bank of England showed
that the U.K. mortgage approvals declined to a 3-month low in
March, while secured lending and consumer credit expanded
strongly.The number of mortgages approved in March fell
unexpectedly to 71,357 from 73,195 in February. It was forecast to
rise to 74,200.
Total lending to individuals increased by GBP 9.3 billion in
March, much bigger than a GBP 5 billion rise seen in February.
In March, M4 money supply slid 0.4 percent on a monthly basis,
which was the first fall in three months. In February, M4 had
increased 0.9 percent. Year-on-year, growth eased to 1.6 percent
from 2.2 percent.
In the Asian trading today, the pound traded higher against its
major rivals.
In the early European trading, the British pound fell to a 9-day
low of 156.28 against the yen, from an early high of 158.06. The
pound may test support near the 152.00 region.
The pound dropped to 1.4596 against the U.S. dollar, from an
early near 3-month high of 1.4664. On the downside, 1.43 is seen as
the next support level for the pound.
Against the euro and the Swiss franc, the pound edged down to
0.7796 and 1.4059 from early highs of 0.7764 and 1.4131,
respectively. If the pound extends its downtrend, it is likely to
find support around 0.79 the euro and 1.37 against the franc.
Looking ahead, preliminary eurozone GDP data for the first
quarter and eurozone unemployment data for March are slated for
release later in the day.
In the New York session, Canada GDP data for February,
industrial product and raw materials price indexes for March, U.S.
personal income and spending data for March, U.S. Chicago PMI for
April and the University of Michigan's final U.S. consumer
sentiment index for April are set to be published.
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