Pound Falls Amid US-China Trade Worries
May 09 2019 - 2:38AM
RTTF2
The pound slipped against its major opponents in the European
session on Thursday, as European shares dropped amid fears that the
U.S.-China conflict could escalate.
After U.S. President Donald Trump threatened to levy additional
tariffs on Chinese goods, Beijing said it would retaliate with
"necessary countermeasures".
As hopes for a trade resolution wane, China's vice premier and
top trade official, Liu He, will arrive in Washington later today
for two days of talks.
Talks between the ruling Conservative and opposition Labor party
were reportedly close to collapse, further weighing on the
currency.
Meanwhile, May told MPs on Wednesday that talks with Labor will
proceed and she's still intending to reach a deal that can secure a
majority in Parliament.
The currency traded mixed against its major counterparts in the
Asian session. While it rose against the greenback and the franc,
it held steady against the euro. Against the yen, it dropped.
The pound fell to 0.8620 against the euro, from a high of 0.8597
hit at 1:45 am ET. On the downside, 0.88 is seen as the next
support level for the pound.
The pound that closed yesterday's trading at 1.3005 against the
greenback weakened to a 9-day low of 1.2975. Next key support for
the pound is seen around the 1.27 area.
The U.K. currency depreciated to a 9-day low of 1.3206 against
the franc from yesterday's closing value of 1.3269. If the pound
slides further, it may find support around the 1.30 level.
The pound declined to 142.23 against the yen, a level unseen
since February 19. The pound is likely to find support around the
140.00 level.
Data from the Cabinet Office showed that Japan's consumer
confidence weakened to the lowest level in more than three years in
April.
The consumer confidence index for households with two or more
persons fell to a seasonally adjusted 40.4 in April from 40.5 in
March. Economists had expected a score of 40.3.
Looking ahead, Canada trade data and new housing price index for
March, U.S. PPI for April, weekly jobless claims for the week ended
May 4, trade data and wholesale inventories for March are due in
the New York session.
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