Forex News: Pound Slides Against Majors

Pound Slides Against Majors

(RTTNews) - The British pound weakened against other major currencies in the European session on Friday, weighed down to a large extent by the weakness in the financial sector, amid reports of likely imposition of windfall tax on banks.

UK Chancellor of the Exchequer Rachel Reeves might increase income; by levying a windfall tax on commercial lenders to recoup the gains they are making from taxpayers on deposits kept at the Bank of England (BoE).

According to the Institute for Public Policy Research, such a fee would provide Reeves with £3.6 billion more leeway against her primary budgetary guideline and raise £32.3 billion over the current five-year parliament.

Also, the mood remains cautious as investors await key U.S. PCE reading due later in the day, for clues about Federal Reserve's possible moves in September.

In the European trading today, the pound fell to more than a 3-week low of 1.0782 against the Swiss franc and a 9-day low of 197.95 against the yen, from early highs of 1.0843 and 198.61, respectively. If the pound extends its downtrend, it is likely to find support around 1.06 against the franc and 195.00 against the yen.

Against the euro and the U.S. dollar, the pound slid to a 4-day low of 0.8674 and a 2-day low of 1.3455 from early highs of 0.8636 and 1.3512, respectively. The pound may test support near 0.87 against the euro and 1.32 against the greenback.

Looking ahead, the German CPI data for August, Canada GDP data for the second quarter, U.S. PCE price index for July, personal income and spending data for July, U.S. Chicago PMI data for August, U.S. University of Michigan's consumer sentiment data for August and U.S. Baker Hughes oil rig count data are slated for release in the New York session.

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