Pound Falls Amid Risk Aversion
07 Settembre 2021 - 10:49AM
RTTF2
The pound weakened against its major rivals in the European
session on Tuesday amid risk aversion, as investors looked to the
European Central Bank's policy meeting for clues on pulling back
pandemic-era stimulus.
A recent spike in euro zone inflation and positive economic
indicators fueled hopes that policymakers could start a discussion
on changes to its bond purchases sooner rather than later.
Worries over reduced policy support along with a slowdown in
global growth prospects kept sentiment subdued.
Survey data from the Lloyds Bank subsidiary Halifax showed that
UK house price annual inflation slowed further in August, but the
average price for a residential property hit a fresh record
high.
The house price index climbed 7.1 percent year-on-year following
a 7.6 percent rise in the previous month.
The pound weakened to 0.8614 against the euro, its lowest level
since July 21. On the downside, 0.88 is possibly seen as its next
support level.
Revised data from Eurostat showed that the euro area recovered
at a faster-than-estimated pace in the second quarter from the
Covid-driven downturn.
Gross domestic product grew 2.2 percent sequentially in the
second quarter, bigger than the initial estimate of 2.0 percent.
The growth reversed the 0.3 percent fall in the first quarter and
the 0.4 percent drop in the fourth quarter of 2020.
The pound depreciated to 5-day lows of 1.3768 against the
greenback and 1.2598 against the franc, off its early highs of
1.3857 and 1.2665, respectively. The next possible support for the
pound is seen around 1.36 against the greenback and 1.24 against
the franc.
The pound retreated from a prior high of 152.22 against the yen,
dropping to a 5-day low of 151.50. The pound is likely to test
support around the 150.00 level, if it drops further.
Preliminary data from the Cabinet Office showed that Japan's
leading index decreased in July after rising in the previous
month.
The leading index, which measures the future economic activity,
fell to 104.1 in July from 104.6 in June. In May, the index was
103.1.
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