Pound Advances Amid Risk Appetite On Fed Rate Hike Doubts
August 30 2016 - 04:49AM
RTTF2
The pound erased its early losses against its major counterparts
in European deals on Tuesday, and strengthened, amid risk appetite
and as a survey from the Confederation of British Industry showed
business volumes were unchanged in the three months to August for
business and professional services despite the pessimistic outlook
following the U.K.'s vote to leave the European Union.
The business lobby group found that optimism slumped in the
services sector but the impact on day-to-day business so far has
been "relatively modest."
European shares are higher, with a rise in oil prices and
expectations that the Federal Reserve may delay hiking interest
rates until after the presidential election in November lifting
sentiment.
Market participants await Friday's monthly jobs report for
further clues to whether a September hike is in the cards.
In other economic news, data from the Bank of England showed
that U.K. mortgage approvals declined to the lowest since early
2015.
The number of mortgage approvals fell to 60,912 in July from
64,152 in June. This was the lowest since January 2015. Economists
had forecast approvals to fall to 61,900.
The currency was lower against most major counterparts in Asian
trading.
The pound advanced to near a 4-week high of 1.2861 against the
franc, off its early low of 1.2791. On the upside, 1.30 is likely
seen as the next resistance level for the pound.
Survey data from the Swiss Economic Institute KOF showed that a
measure reflecting Swiss economic activity declined for the first
time in three months and at a faster-than-expected pace in August,
to its lowest level in eight months.
The KOF Economic Barometer declined to 99.8 from 103.5 in July,
which was revised from 102.7. Economists had forecast a score of
102.
The pound bounced off to 1.3118 against the greenback, from a
low of 1.3059 hit at 2:45 am ET. The pound is seen finding
resistance around the 1.33 mark.
The pound climbed to 134.25 against the yen and 0.8515 against
the euro, coming off from its early 4-day lows of 133.34 and
0.8552, respectively. The next possible resistance for the pound
may be found around 135.5 against the yen and 0.84 against the
euro.
Looking ahead, U.S. S&P/Case-Shiller home price index for
June and U.S. consumer confidence index for August are set to be
published shortly.
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