Pound Falls On Brexit Worries, Risk Aversion
26 Septembre 2016 - 6:56AM
RTTF2
The pound declined against its major counterparts in early
European deals on Monday, amid lingering worries about the
consequences of Brexit, after U.K. Foreign Secretary Boris Johnson
insisted for withdrawal from the European Union in early 2017.
Speaking with Sky News late last week, Johnson suggested that UK
could trigger Article 50 by early May 2017 and that he expects the
negotiations over terms of departure to complete within May
2019.
Further weighing on the currency was risk aversion, as traders
remained cautious ahead of tonight's first U.S. presidential debate
and an informal OPEC meeting in Algiers that starts today.
A Washington Post-ABC News poll has Democratic presidential
nominee Hillary leading Republican candidate Trump by 2 points on
the eve of the debate.
In economic front, survey by the Confederation of British
Industry and PricewaterhouseCoopers showed that sentiment in the
British financial services sector weakened for the third straight
time in the three months to September.
A balance of -13 percent said they were less optimistic about
their overall business situation compared to -13 percent in the
prior quarter. This was the third consecutive fall, the longest
period of decline in sentiment since 2009.
The currency held steady against its key counterparts in the
Asian session.
The pound declined to near 6-week lows of 0.8699 against the
euro and 129.89 against the yen, from its previous highs of 0.8647
and 131.23,respectively. The next possible support levels for the
pound may be located around 0.88 against the euro and 128.00
against the yen.
The pound dropped to 1.2507 against the Swiss franc, its weakest
since August 19. Continuation of the pound's downtrend may see it
challenging support around the 1.22 region.
The pound, having advanced to 1.2987 against the dollar at 10:00
pm ET, reversed direction and fell to 1.2916. On the downside, 1.28
is likely seen as the next support level for the pound.
Looking ahead, U.S. new home sales data for August is slated for
release in the New York session.
At 8:30 am ET, European Central Bank's member of the supervisory
board, Ignazio Angeloni, speaks at a conference "Strengths and
Weaknesses of European Banking" organized by Brevan Howard Centre
and Imperial College Business School, in London.
At 9:00 am ET, European Central Bank President Mario Draghi will
testify before the Committee on Economic and Monetary Affairs of
European Parliament, in Brussels.
At 9:30 am ET, Minneapolis Fed President Neel Kashkari
participates in a fireside chat moderated by Harry Melander,
president of the Minnesota Building and Construction Trades Council
and board member of the Federal Reserve Bank of Minneapolis, in
Minneapolis, U.S.
Fifteen minutes later, European Central Bank Vice President
Vitor Constancio is expected to speak at a conference, in
Frankfurt.
At 11:45 am ET, Federal Reserve Governor Daniel Tarullo will
deliver a speech titled "Next Steps in the Evolution of Stress
Testing" at the Yale School of Management Leaders Forum, in New
Haven.
At 12:00 pm ET, Austrian National Bank Governor and ECB
Governing Council member Ewald Nowotny is expected to speak on the
future of banks, in Vienna.
At 1:30 pm ET, Federal Reserve Bank of Dallas President Robert
Kaplan will participate in moderated Q&A before the Independent
Bankers Association of Texas Annual Convention in Dan Antonio.
Euro vs Sterling (FX:EURGBP)
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Euro vs Sterling (FX:EURGBP)
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