Pound Weakens In Cautious Trade

(RTTNews) - The pound fell against its major counterparts in the European session on Wednesday, amid weak industrial profit data from China and on a report that the Biden administration is planning to impose new curbs on exports of artificial intelligence chips to China.

Official data showed that China's industrial profits declined sharply in May amid weak demand and falling producer prices.

Profits at industrial firms posted an annual decrease of 18.8 percent in January to May period, the National Bureau of Statistics said. However, this was slower than the 20.6 percent decline logged in January to April.

The Wall Street Journal reported that the United States is mulling new curbs on exports of artificial intelligence chips to China.

Investors focus on central bankers' speeches at the European Central Bank Forum in Sintra, including European Central Bank President Christine Lagarde, Federal Reserve Chair Jerome Powell and Bank of Japan Governor Kazuo Ueda.

The pound fell to 182.72 against the yen and 1.1367 against the franc, off its early highs of 183.69 and 1.1402, respectively. The next likely support for the pound is seen around 175.00 against the yen and 1.11 against the franc.

The pound declined to a 5-day low of 1.2685 against the dollar and a 6-day low of 0.8633 against the euro, reversing from its early highs of 1.2751 and 0.8589, respectively. The next possible support for the pound is seen around 1.24 against the dollar and 0.88 against the euro.

At 9:30 am ET, Federal Reserve Chair Jerome Powell is scheduled to participate in a panel discussion at the ECB Forum on Central Banking, in Sintra with European Central Bank President Christine Lagarde, Bank of England Governor Andrew Bailey and Bank of Japan Governor Kazuo Ueda.

U.S. wholesale inventories and advance goods trade balance for May will be released in the New York session.