Pound Falls As European Shares Traded Lower

(RTTNews) - The British pound weakened against other major currencies in the European session on Thursday, as the European stocks subdued due to year-end profit booking.

Amid interest rate uncertainty, traders looked ahead to the release of the final estimates of U.S. third-quarter GDP data later in the day and the Fed's preferred inflation gauge on Friday for direction.

The German DAX and France's CAC 40 both slipped around 0.4 percent, while the U.K.'s FTSE 100 was down 0.2 percent.

In economic news, official data revealed Britain's budget deficit widened in the financial year to November to the second highest level on record, giving little fiscal headroom for the government to cut tax rates.

In the financial year to November, government borrowing increased by GBP 24.4 billion from the same period last year to GBP 116.4 billion. This was the second highest financial year-to-November borrowing on record.

In the Asian trading today, the Sterling showed mixed trading against its major rivals. While the pound fell against the yen, it held steady against the euro, U.S. dollar and the Swiss franc.

In the European trading now, the pound fell to near 4-week lows of 0.8679 against the euro and 1.0875 against the Swiss franc, from early highs of 0.8657 and 1.0907, respectively. If the pound extends its downtrend, it is likely to find support around 0.87 against the euro and 1.07 against the franc.

Against the U.S. dollar and the yen, the pound dropped to a 1-week low of 1.2612 and a 2-day low of 184.67 from early highs of 1.2651 and 185.99, respectively. On the downside, 1.24 against the greenback and 179.00 against the yen are seen as the next support levels for the pound.

Looking ahead, Canada retail sales data for October, U.S. GDP growth rate for the third quarter, U.S. weekly jobless claims and U.S. Federal Reserve Bank of Kansas City manufacturing index for December are slated for release in the New York session.