Pound Weakens Amid U.K. Political Worries
08 Novembre 2017 - 9:29AM
RTTF2
The pound declined against its major counterparts in the
European session on Wednesday, weighed by political uncertainty in
the U.K., as the nation's international development secretary Priti
Patel has cut short her trip to Asia amid allegations of having
undisclosed meetings with Israeli politicians. Patel, who was on a
visit to Africa, has been ordered to fly back to London by May.
Patel came under fire over a secret trip to Israel, where she
held 12 undisclosed meetings, including one with Prime Minister
Benjamin Netanyahu, without reporting the Foreign Office or
government in advance.
Breaching protocol, Patel visited the Golan Heights and
discussed the possibility of U.K. funding to be used for the
medical treatment for Syrians displaced by civil war.
The accusation came a week after the resignation of the defense
minister Michael Fallon following allegations of sexual
harassment.
In the economic front, UK firms plan to continue to lift their
investment moderately over the coming year, according to Agents'
Summary of Business Conditions published by Bank of England.
However, investment growth was expected to be somewhat weaker
over the following two years. "Economic uncertainty was the biggest
drag on investment plans," the summary showed.
The currency has been trading in a negative territory in the
Asian session.
The pound slipped to 2-day lows of 1.3091 against the dollar and
1.3082 against the franc, from its early highs of 1.3176 and
1.3171, respectively. On the downside, 1.30 is likely seen as the
next support level for the pound against both the greenback and the
franc, respectively. The pound fell to near a 3-week low of 148.56
against the Japanese yen, reversing from an early high of 150.13.
Continuation of the pound's downtrend may see it challenging
support around the 147.00 area. Preliminary data from the Cabinet
Office showed that Japan's leading index declined as expected in
September, after strengthening in the previous month.
The leading index, which measures the future economic activity,
dropped to 106.6 in September from 107.2 in August, which was the
highest score since February 2014. The figure also matched
consensus estimate. The U.K. currency weakened to a 2-day low of
0.8853 against the euro, off its previous high of 0.8797. The next
possible support for the pound is seen around the 0.90 region.
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