The pound dropped against the other major currencies in early European deals on Tuesday amid rising risk aversion, as commodities fell and investors became cautious ahead of the Federal Reserve’s two-day meeting starting today.
Oil extended overnight losses as Iran dampened hopes of coordinated action to cap output.
Gold extended losses for a third consecutive session, as investors await further clues about the Fed’s stance on interest rate path, as spate of strong U.S. economic data raised the odds for higher borrowing costs later this year.
The Bank of England and the Swiss National Bank will announce monetary policy decision on Thursday.
The currency has been trading in a negative territory in Asian trading.
The pound fell to a 4-day low of 0.7814 against the euro and a 6-day low of 160.68 against the yen, down from yesterday’s closing values of 0.7762 and 162.78, respectively. If the pound extends slide, 0.79 against the euro and 158.00 against the yen are likely seen as its next support levels.
The pound declined to 5-day lows of 1.4021 against the franc and 1.4219 against the dollar, compared to Monday’s closing values of 1.4113 and 1.4301, respectively. The next possible support for the pound is seen around 1.39 against the franc and 1.41 against the greenback.
Looking ahead, U.S. advance retail sales data and PPI data, both for February, Empire State manufacturing index for March, U.S. business inventories for January, the NAHB U.S. housing market index for March and Canada existing home sales data for February are slated for release in the New York session.
The material has been provided by InstaForex Company – www.instaforex.com