Pound Lower On Concerns Over Coronavirus Spread
27 February 2020 - 7:10PM
RTTF2
The pound lost ground against its major counterparts in the
European session on Thursday, as the sell-off in European markets
intensified following the spread of the coronavirus outside China,
raising concerns of a pandemic.
Two more patients tested positive for coronavirus in the U.K.,
taking total number of cases to 15.
Italy reported 100 new infections, with total cases soaring
above 400.
South Korean health authorities confirmed 171 new cases of
coronavirus. The total number of infections reached 1,766.
One new coronavirus case was reported in Valencia, Spain while
one death confirmed in Paris, France.
Investors worry that the spread of the coronavirus could dent
global growth.
Data from the Society of Motor Manufacturers and Traders showed
that UK car production declined for the fifth consecutive month in
January as an increase in output for exports failed to offset the
sharp decrease in domestic demand.
Car production fell 2.1 percent in January from the last year.
Production has now fallen in 19 of the last 20 months.
The pound slipped to a weekly low of 1.2860 against the dollar,
from a high of 1.2946 seen at 3:30 am ET. The pound may locate
support around the 1.27 level.
Reversing from a high of 1.2608 set at 6:15 pm ET, the pound
declined to a 4-1/2-month low of 1.2487 against the franc. The next
likely support for the pound is seen around the 1.23 level.
The pound depreciated to more than a 3-week low of 0.8511
against the euro, after rising to 0.8427 at 5:15 pm ET. Should the
pound slides further, 0.88 is likely seen as its next support
level.
Survey results from the European Commission showed that Eurozone
economic confidence strengthened to a nine-month high in
February.
Rising for the fourth straight month, the economic sentiment
index came in at 103.5 in February, versus a revised 102.6 in
January. Economists had forecast the reading to fall to 102.6 from
January's initial estimate of 102.8.
Extending slide, the U.K. currency fell to 141.44 against the
yen. That was the weakest since February 10. Immediate support for
the pound is possibly seen around the 139.00 level.
Looking ahead, U.S. GDP data for the fourth quarter, weekly
jobless claims for the week ended February 22, durable goods orders
and pending home sales for January are scheduled for release in the
New York session.
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