Forex News: Pound Rises Amid Risk On Mood

Pound Rises Amid Risk On Mood

(RTTNews) - The British pound strengthened against other major currencies in the European session on Thursday amid risk-on mood by the investors, as a bond market sell-off stabilized and dovish Fed comments coupled with weak U.S. data reinforced rate-cut bets.

Fed independence worries also eased, with Stephen Miran, President Donald Trump's nominee for the open Federal Reserve Governor role, pledging to uphold independence of monetary policy in his opening remarks submitted to the Senate Banking Committee.

Meanwhile, the Trump administration on Wednesday night asked the Supreme Court to quickly intervene to overturn a lower court decision that found most of his tariffs are illegal.

Trading later in the day may be impacted by reaction to a slew of U.S. economic data, including reports on weekly jobless claims, service sector activity and the U.S. trade deficit.

As the labor market shows signs of fatigue, all eyes now turn to Friday's jobs report for August-the first since July's shocker, which included a massive downwards revision of jobs growth for May and June.

In economic news, data from the Society of Motor Manufacturers & Traders showed that U.K. new car registrations decreased for the second straight month in August.

Car sales dropped 2.0 percent annually to 82,908 units in August, which is normally the quietest month of the year, as the sales are generally less than 5 percent of annual deliveries ahead of September's number plate change.

Data from S&P Global showed that the UK construction sector contracted for the eighth consecutive month in August due to marked reductions in the housing and civil engineering works.

The construction Purchasing Managers' Index posted 45.5 in August, up from 44.3 in July. However, the score remained well below the 50.0 mark indicating sharp fall in construction output.

In the European trading today, the pound rose to 2-day highs of 0.8661 against the euro and 1.0827 against the Swiss franc, from early lows of 0.8681 and 1.0798, respectively. If the pound extends its uptrend, it is likely to find resistance around 0.85 against the euro and 1.09 against the franc.

Against the U.S. dollar, the pound advanced to Wednesday's high of 1.3460 from an early low of 1.3417. The pound may test resistance around the 1.36 region.

The pound edged up to 199.49 against the yen, from an early low of 198.78. On the upside, 201.00 is seen as the next resistance level for the pound.

Looking ahead, Canada and U.S. trade data for July, U.S. weekly jobless claims data, U.S. and Canada PMI reports for August and U.S. EIA crude oil data are slated for release in the New York session.

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