Pound Declines As European Shares Slip On Rate Hike Worries
(RTTNews) - The pound fell against its major counterparts in the European session on Friday, as Fed Chair Jerome Powell's cautious comments on the rate hike path dashed expectations of a peak in U.S. interest rates.
Echoing recent hawkish statements from several officials, Powell said on Thursday that the Fed wasn't confident yet they had reached a sufficiently restrictive level on monetary policy to bring inflation down to the 2 percent target.
Powell's restrictive stance on monetary policy lifted the U.S. dollar, as Fed rate hike expectations rose.
Investors were also reacting to data showing that the U.K. economy failed to grow between July to September but avoided the start of a recession.
GDP was flat in the third quarter for the first time this year, avoiding an expected decline, official data showed.
The pound declined to a 1-week low of 1.2200 against the greenback and an 8-day low of 1.1002 against the franc, off its early highs of 1.2237 and 1.1058, respectively. The next likely support for the pound is seen around 1.20 against the greenback and 1.08 against the franc.
The pound slipped to a 2-day low of 184.80 against the yen and a 10-day low of 0.8748 against the euro, reversing from its previous highs of 185.21 and 0.8715, respectively. The pound is likely to face support around 176.00 against the yen and 0.90 against the euro.
Looking ahead, University of Michigan's preliminary consumer sentiment index for November is due in the New York session.
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