Pound Rises Amid Risk Appetite
July 10 2018 - 2:07AM
RTTF2
The pound climbed against its major counterparts in the European
session on Tuesday amid risk appetite, as investors brushed aside
trade worries and looked ahead to a strong quarterly earnings
season.
Traders digested political turmoil in the U.K., as the
resignation of Foreign Secretary Boris Johnson and Brexit minister
David Davis put the British government into disarray.
Data from Office for National Statistics showed that U.K
economic growth increased in May, led by services, while production
declined.
GDP grew 0.3 percent month-on-month in May after the 0.2 percent
increase in April and a flat reading in March.
Meanwhile, U.K. industrial production decreased for the third
straight month in May, defying economists' forecast for an
increase.
Industrial production fell 0.4 percent month-over-month in May,
slower than April's revised 1.0 percent decline.
The UK visible trade deficit narrowed slightly in May, another
data showed.
The trade in goods showed a shortfall of GBP 12.36 billion in
May, down from GBP 12.40 billion in April. The expected deficit was
GBP 12.0 billion.
The currency traded mixed against its major counterparts in the
Asian session. While it fell against the greenback and the franc,
it held steady against the euro and the yen.
The pound climbed to 1.3301 against the greenback, from a low of
1.3224 seen at 2:15 am ET. The pound is likely to find resistance
around the 1.34 level.
The U.K. currency advanced to 147.77 against the yen, its
strongest since June 14. The pound is seen finding resistance
around the 149.00 level.
The pound edged up to 1.3194 against the Swiss franc, off its
early low of 1.3125. The next possible resistance for the pound is
seen around the 1.33 level.
Reversing from an early low of 0.8875 against the euro, the
pound rose to 0.8828. If the pound continues its rise, 0.87 is
possibly seen as its next resistance level.
Survey data from the Centre for European Economic Research
showed that German investor confidence fell to its lowest level in
nearly six years in July, as sentiment was hurt by political
uncertainty.
The ZEW Indicator of Economic Sentiment for Germany dropped 8.6
points to minus 24.7 points, which was the lowest reading since
August 2012.
Looking ahead, Canada housing starts for June and building
permits for May are due in the New York session
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