Pound Declines As Risk Appetite Recedes
June 11 2020 - 4:06AM
RTTF2
The pound fell against its major counterparts in the European
session on Thursday, as concerns about a second wave of infections
in the U.S. and pessimistic outlook from the Federal Reserve
dampened risk sentiment.
The number of confirmed cases exceeded 2 million on Wednesday,
as all states have reopened after pandemic shutdown.
New infections have been reported in Arizona, Texas, Florida and
California, triggering warning of a potential second round of
infections in the country.
Federal Reserve Chairman Jerome Powell warned of "a long road"
to recovery and said the Fed's rescue efforts will not be enough on
their own, and it would likely require additional fiscal stimulus
from Congress to stave off a deeper economic downturn.
In economic releases, the U.K. house price indicator moved
deeper into negative territory in May amid coronavirus pandemic,
according to a survey data from the Royal Institution of Chartered
Surveyors.
The house price balance fell to -32 percent in May from -22
percent in April. This was the weakest monthly figure since
2010.
The pound weakened to a 2-day low of 1.2651 against the
greenback, compared to yesterday's closing value of 1.2747. The
pound is poised to find support around the 1.20 level.
The pound depreciated to a 9-day low of 135.32 against the yen
and a 10-day low of 1.1926 against the franc, from yesterday's
closing values of 136.54 and 1.2028, respectively. The next
possible support for the pound is seen around 128.00 against the
yen and 1.13 against the franc.
The pound hit 0.8976 against the euro, setting a 6-day low. At
yesterday's close, the pair was worth 0.8920. The pound is seen
finding support around the 0.92 level.
Looking ahead, U.S. weekly jobless claims for the week ended
June 6 and producer price index for May are due in the New York
session.
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