Forex News: Pound Weakens Despite BoE's Slower Rate Cut Prospects

Pound Weakens Despite BoE's Slower Rate Cut Prospects

(RTTNews) - The pound was lower against its major counterparts in the New York session on Friday, as the U.S. dollar rebounded after the Thanksgiving holiday.

U.K. inflation rose sharply in October, official data showed last week, dampening the prospects of a final interest rate cut this year.

The BoE cut rates by 25 basis points earlier this month, but indicated gradual rate cuts in the future.

On the data front, UK mortgage approvals increased to the highest level in more than two years in October as falling interest rates boosted housing market activity but consumers became more cautious about borrowing and saving ahead of the Autumn Budget.

Mortgage approvals for house purchases, an indicator of future borrowing, increased to 68,303 in October from 66,115 in the prior month. Approvals were expected to fall to 65,000.

The pound fell to near a 2-month low of 190.15 against the yen and a 2-day low of 1.1166 against the franc, from an early high of 192.31 and a 4-day high of 1.1220, respectively. The next possible support for the currency is seen around 185.00 against the yen and 1.10 against the franc.

The pound retreated to 1.2671 against the greenback, from an early more than 2-week high of 1.2749. If the currency falls further, it is likely to test support around the 1.24 region.

The pound declined to 0.8331 against the euro in the previous session and held steady thereafter. This may be compared to an early 1-week high of 0.8304. The currency is likely to locate support around the 0.86 level.

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