RTTN: Pound Falls To 2-day Low Against Dollar And Yen
(RTTNews) - In early European deals on Thursday, the pound pared its Asian session gains against the currencies of US, Japan and Switzerland as a report showed that U.K.'s visible trade deficit widened in March. The pound fell to a 2-day low against the dollar and the yen.
However, the pound largely traded in a loose range against the euro.
U.K.'s visible trade deficit widened significantly in March to GBP 7.5 billion, data from Office for National Statistics revealed. The shortfall totaled GBP 6.3 billion in February, revised from GBP 6.2 billion. The deficit for March was larger than the GBP 6.4 billion consensus forecast.
The pound fell to a 2-day low of 136.95 against the yen at 5:30 am ET, from a high of 139.57 hit at 3:00 am ET. On the downside, the British currency may target around the 136.00 level. The pound-yen pair is currently worth 139.39, compared to yesterday's close of 138.26.
Japan's trade balance and the eco watchers survey reports released earlier in the day likely influenced the yen.
Japan posted a balance of payment trade surplus of 1.0747 trillion yen in March, the Ministry of Finance said, surging a record 745.4 percent on year.
The current account also saw a surplus of 2.534 trillion yen - rising 65.1 percent on year and beating forecasts for a surplus of 2.212 trillion yen after coming in at 1.47 trillion yen in February.
Japan's current economic conditions improved for the fifth consecutive month in April, the Eco Watchers survey published by the Cabinet Office showed. The current index stood at 49.8 in April, up from 47.4 in March. The expected reading was 47.5.
Against the euro, the pound has been extending its Asian session's choppy trading in early European deals on Thursday. The pound is now trading at 0.8523, up from yesterday's close of 0.8514.
The European Central Bank's decision on May 10 to intervene in the euro area public and private debt securities markets was designed not to affect the monetary policy stance, the central bank said in its latest monthly report.
On the economy, the central bank said he latest information confirmed that the economic recovery in the euro area continued in the early months of 2010. Looking ahead, the Governing Council expects real GDP to expand at a moderate pace, but growth patterns could be uneven in an environment of unusually high uncertainty.
The pound that climbed to 1.6553 against the franc at 3:10 am ET Thursday lost ground thereafter. Currently, the pound is trading at 1.6451 against the franc, down from yesterday's close of 1.6478. If the UK currency weakens further, it may likely target the 1.642 level.
