Pound Slides As Conservative Polling Lead Narrows After U.K Terror Attack
May 25 2017 - 11:56PM
RTTF2
The pound weakened against its major rivals in the Asian session
on Friday, after an opinion poll showed that the lead of the
Conservative party had narrowed considerably after the Manchester
bomb attack.
The YouGov poll for the Times published on Thursday showed that
the Tory lead over Labour had been cut to five points, with Tories
at 43 percent and Labour at 38 percent.
The survey, carried out after the Manchester terror attack,
showed a four point change since last week when the Conservatives
lead over their rival was at nine points.
With just two weeks to go for polls, the survey cast uncertainty
over the outcome of the election and brings in risk to Brexit
talks.
The currency was also weighed by falling crude oil prices, after
OPEC agreed to extend cuts in oil output by nine months to March
2018, while investors had been hoping for deeper production
cuts.
Investors are also cautious following media reports that Jared
Kushner, the son-in-law and adviser of U.S. President Donald Trump,
has come under FBI scrutiny in its Russia probe.
The pound fell against its most major rivals on Thursday, after
the U.K. GDP growth was revised down in the first quarter.
In Asian trading, the pound weakened to 1.2867 against the
greenback, its lowest since May 16 and was down by 0.6 percent from
Thursday's closing value of 1.2940. The pound is likely to target
support around the 1.27 region.
The pound that closed Thursday's trading at 1.2589 against the
Swiss franc weakened to more than a 6-week low of 1.2523.
Continuation of the pound's downtrend may see it challenging
support around the 1.24 level.
The pound dipped to a 4-week low of 143.32 against the Japanese
yen, compared to 144.72 hit late New York Thursday. The next
possible support for the pound-yen pair is seen around the 140.5
mark.
Data from the Ministry of Internal Affairs and Communications
showed that overall consumer prices in Japan gained 0.4 percent on
year in April. That was in line with expectations and up from 0.2
percent in March.
Core consumer prices were up 0.3 percent on year - shy of
forecasts for 0.4 percent and up from 0.2 percent in the previous
month.
The pound reversed from an early high of 0.8655 against the
euro, touching near a 2-month low of 0.8711. If the pound extends
slide, 0.885 is possibly seen as its next support level.
Looking ahead, U.S. durable goods orders for April, second
estimate of GDP data for the first quarter and the University of
Michigan's final consumer sentiment index for May are due in the
New York session.
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