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Pound Falls Amid Risk Aversion


The British pound weakened against other major currencies in the European session on Monday, as European shares fell amidst anxiety ahead of decisions of key central banks.

The Federal Reserve’s decision is due on Wednesday whereas the Bank of England and Bank of Japan would make known their decisions on Thursday.

The benchmark U.K. FTSE 100 is down 26.75 points at 7,684.63. While the German’s DAX is down 100 points at 15, 973.53 and the France CAC- 40 is down 80.23 points at 7,298.59.

The pound held steady against other major currencies in the Asian session.

In the European trading now, the pound fell to a 5-day low of 0.8619 against the euro and a 4-day low of 182.73 against the yen, from early highs of 0.8602 and 183.35, respectively. If the pound extends its downtrend, it is likely to find support around 0.87 against the euro and 180.00 against the yen.

Against the U.S. dollar and the Swiss franc, the pound dropped to nearly a 3-1/2-month low of 1.2370 and nearly a 3-week low of 1.1086 from early highs of 1.2405 and 1.1124, respectively. The pound may test support near 1.22 against the greenback and 1.10 against the franc.

Looking ahead, Canada housing starts and PPI for August and U.S. NAHB housing market index for September are set to be published later.

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