The pound weakened against its major counterparts in the European session on Tuesday, as European shares fell amid continued concerns about inflation due to the energy crisis and on possibility of China continuing its crackdown on private industry.
Indications of Beijing widening its crackdown on private and state firms further dampened the mood.
Beijing is preparing to begin inspections on the country’s state banks and other financial institutions to examine the lending, investment and regulatory records with private firms.
Traders look forward to data on U.S. consumer price index and retail sales for more clues about the possible timing of reduction in asset purchases.
Concerns about Evergrande reemerged, after the property developer failed to make interest payments on dollar bonds due on Monday.
Data from the Office for National Statistics showed that UK employment increased sharply in September.
The number of payroll employees showed another monthly increase, up 207,000 to a record 29.2 million in September.
In three months to August, the employment rate increased 0.5 percentage points on the quarter, to 75.3 percent. At the same time, the ILO jobless rate came in at 4.5 percent in three months to August, as economists’ expected.
The pound slipped to 5-day lows of 1.2580 against the franc and 0.8518 against the euro, off its early highs of 1.2630 and 0.8489, respectively. The pound is seen finding support around 1.24 against the franc and 0.86 against the euro.
The pound retreated from its prior high of 1.3621 against the greenback, declining to a 6-day low of 1.3568. On the downside, 1.34 is likely seen as its next support level.
In contrast, the pound rebounded to 154.46 against the yen, from a low of 153.68 seen at 3 am ET. The pound may find resistance around the 156 level.
The material has been provided by InstaForex Company – www.instaforex.com
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