Pound Drops Amid Risk Aversion
06 Dezember 2017 - 7:56AM
RTTF2
The pound weakened against its major counterparts in the
European session on Wednesday, as weak commodity prices, worries
over a possible U.S. government shutdown and U.S. President Donald
Trump's comments that he plan to transfer his country's embassy to
Jerusalem dented risk appetite.
Funding for the U.S. government runs out Friday, and some
Democratic lawmakers are threatening to vote against spending bills
unless Congress addresses their demands on funding priorities and
protecting young immigrants.
Oil prices dropped on API data showing a rise in U.S gasoline
stocks and distillate inventories last week.
The currency has been trading in a negative territory in the
Asian session.
The pound dropped to a weekly low of 149.76 against the yen,
from a high of 151.40 hit at 5:00 pm ET. If the pound weakens
further, 148.00 is possibly seen as its next support level.
Moody's Investors Service retained the sovereign ratings of
Japan.
The credit rating was kept unchanged at 'A1' with 'stable'
outlook.
The pound reversed from an early high of 1.3443 against the
greenback, falling to a weekly low of 1.3358. Continuation of the
pound's downtrend may see it challenging support around the 1.32
area.
The pound that closed yesterday's trading at 0.8796 against the
euro declined to 0.8853.The next possible support for the pound is
seen around the 0.92 level.
Data from Destatis showed that Germany's factory orders
increased unexpectedly in October.
New orders in manufacturing climbed 0.5 percent month-on-month
in October, following a revised 1.2 percent rise in September.
Orders were forecast to fall 0.2 percent.
The pound was trading in a negative territory against the franc
with the pair trading at 1.3235. On the downside, 1.31 is likely
seen as the next support for the pound.
Looking ahead, the Bank of Canada will announce its decision on
interest rate at 10:00 am ET. Economists expect the bank to keep
rate on hold at 1.00 percent.
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