Pound Weakens As European Shares Fall On Inflation Concerns
October 06 2021 - 02:49AM
RTTF2
The pound dropped against its key counterparts in the European
session on Wednesday, as a sell-off in government bonds fueled
concerns about inflation and potential reduction in stimulus by the
U.S. Federal Reserve.
European shares fell as a spike in bond yields pressured tech
stocks.
Rising prices for crude oil and natural gas added to worries
about inflationary pressures and tightening of monetary policy.
Traders await U.S. ADP private payrolls data due later in the
day for more clues about the Fed's policy outlook.
Market participants hope that the Fed would begin to reduce its
asset purchases as soon as November and rising inflation and signs
of improvement in the labor market.
The pound declined to a 2-day low of 1.3544 against the
greenback, from a high of 1.3632 seen at 5 pm ET. The pound is
likely to challenge support around the 1.33 region
The pound edged down to 151.01 against the yen and 1.2593
against the franc, off its early 8-day highs of 152.16 and 1.2661,
respectively. The pound is poised to challenge support around
147.00 against the yen and 1.24 against the franc.
In contrast, the pound advanced to a session's high of 0.8503
against the euro from an early low of 0.8527. On the upside, 0.84
is likely seen as its next resistance level.
Looking ahead, U.S. ADP private payrolls data for September is
set for release at 8:15 am ET.
Euro vs Sterling (FX:EURGBP)
Forex Chart
From Feb 2024 to Mar 2024
Euro vs Sterling (FX:EURGBP)
Forex Chart
From Mar 2023 to Mar 2024