(RTTNews) - The pound declined against other major currencies in the European session on Friday as yield on Spanish 10-year bonds rose above 6 percent, before stress test results of the country's banks scheduled later in the day.
The stress test results will reveal the amount required to recapitalize Spain's debt-ridden banks.
The Spanish government on Thursday unveiled its budget for 2013, which focused on spending cuts rather than tax hikes. Under the new budget, government ministries will have their budgets slashed by 8.9 percent in 2013, while public spending will be cut by 58 percent overall.
In Greece, the leaders of the three political parties supporting the coalition government have reached a tentative agreement on a new 11.5 billion euros package of spending cuts and tax increases demanded by international creditors in exchange for two major bailouts.
French President Francois Hollande unveiled his first budget that heavily tightened spending and raised taxes on the rich.
The government plans to cut its budget deficit to 3 percent of gross domestic product next year from 4.5 percent in 2012. GDP is forecast to grow just 0.8 percent. The spending reduction is set to save EUR 10 billion.
Further, the government levied a 75 percent tax on earnings above EUR 1 million.
Data released by the Office for National Statistics showed that U.K.'s service sector output grew less than forecast in July,.
The seasonally adjusted index of services increased 1.1 percent on a monthly basis in July, slower than the forecast for a 1.5 percent rise.
On an annual basis, the index rose 0.7 percent.
The pound that pulled back from an early 1-week high of 1.6274 against the greenback and a 3-day high of 126.16 against the yen declined further. The pound is now trading at 1.6191 against the greenback and 125.68 against the yen, compared to yesterday's close of 1.6238 and 126.02, respectively. The pound is likely to test support levels at 1.615 against the greenback and 125.00 against the yen.
Industrial output in Japan contracted a seasonally adjusted 1.3 percent on month in August, the Ministry of Economy, Trade and Industry said in today's preliminary reading.
On a yearly basis, industrial production fell 4.3 percent - again shy of expectations for a decline of 3.4 percent following the 0.8 percent contraction in the previous month
A separate data showed that retail sales in Japan were up 1.8 percent on month in August, worth 11.141 trillion yen.
Against the franc, the pound declined to 1.5140, its lowest level in a week. If the British currency falls further, it will breach 1.51 level. The pair closed deals at 1.5222 yesterday.
(RTTNews) - The Swiss economic outlook remained positive in September, the KOF Swiss Economic Institute said.
The index rose to 1.67 points from 1.59 a month ago.
The pound fell to a 4-day low of 0.7994 against the euro with 0.805 seen as the next support level. At Thursday's close, the pair was quoted at 0.7955.
Retail sales in Germany recovered in August following a modest decline in the previous month. Sales rose 0.3 percent in August from a month earlier when adjusted for seasonal and calendar variations. This was a tad above the 0.2 percent growth expected by economists.
Eurozone inflation rose unexpectedly in September due to an increase in energy and food prices, flash estimate from Eurostat showed. Inflation increased to 2.7 percent in September from 2.6 percent in August. The rate was forecast to slow to 2.4 percent.
Looking ahead, the U.S. personal income and spending for August, Chicago PMI and the University of Michigan confidence-both for September are the major releases in the North American session.
