Pound Falls On Policy Tightening Worries
17 December 2021 - 5:49PM
RTTF2
The pound declined against its major counterparts in the
European session on Friday, as concerns over tighter monetary
policy, rising coronavirus cases and U.S.-China tensions dragged
down European shares.
Investors digested policy moves from the U.S. Federal Reserve,
the Bank of England and the European Central Bank to curb
inflation.
U.S. authorities imposed sanctions on eight Chinese high-tech
companies and export restrictions on Chinese organization, citing
national security and human rights issues.
Omicron worries persisted as U.K. reported record covid
infections and hospitalizations continued to climb in the U.S.
Data from the Office for National Statistics showed that UK
retail sales growth accelerated in November.
The retail sales volume grew 1.4 percent month-on-month in
November, faster than the 1.1 percent increase seen in October and
also economists' forecast of +0.8 percent.
The pound dropped to 1.3285 against the greenback, from a high
of 1.3339 seen at 4:30 am ET. The pound is seen facing support
around the 1.31 level.
After rising to 0.8493 at 9:15 pm ET, the pound weakened to
0.8527 against the euro. Next key support for the pound is likely
seen around the 0.87 level.
The pound depreciated to 2-day lows of 150.80 against the yen
and 1.2198 against the franc, following its prior highs of 151.72
and 1.2259, respectively. The pound is likely to challenge support
around 146.00 against the yen and 1.20 against the franc.
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