BRUSSELS (Alliance News) - The pound declined against other major currencies in early European deals on Tuesday, as European stocks fell on concerns over situation in Crimea after Russian President Vladimir Putin took steps to annex the region, denying sanctions from the West.
On Monday, Putin had signed a decree recognizing Crimea as an independent state, a necessary step to proceed with the annexation. Putin is scheduled to speak to the Russian parliament today, where he may announce formal absorption of Crimea.
Meanwhile, the German constitutional court is to give final ruling on the legality of the European Stability Mechanism bailout fund, European bailout fund.
Traders await Federal Reserve's two-day monetary policy meeting starting later in the day, with economists expecting the central bank to announce another USD10 billion cut to its bond-buying program. Fed Chair Janet Yellen will deliver her first press conference after the conclusion of the meeting on Wednesday.
The pound hit a 4-day low of 1.6590 against the greenback, down from yesterday's closing value of 1.6637. The pound is likely to face support around the 1.65 zone.
The pound fell to a 4-day low of 1.4494 against the franc and its further decline below the 1.447 area will lead to lowest level since December 18. If the pound extends slide, it may eye support around the 1.44 mark.
The economic upturn in Switzerland is set to strengthen further in 2014 and 2015, the State Secretariat for Economic Affairs, or SECO, said in its Spring Forecast today.
After reporting a solid 2% expansion in 2013, the expert group expects growth to accelerate further to 2.2% in 2014. Nonetheless, the rate was slightly below the 2.3% expansion estimated in December.
Reversing from an early high of 0.8362 against the euro, the pound fell to near a 3-month low of 0.8386. The next possible downside target for the pound is seen around the 0.845 region.
Germany's wholesale prices decreased at the fastest annual rate in four months during February, data from Destatis showed today.
The wholesale price index declined 1.8% year-on-year, after falling 1.7% in January. Previously, a similar size fall was logged in October.
The pound declined to a 4-day low of 168.26 against the yen, after reaching session's high of 169.61 in the early Asian session. Further weakness may take the pound to a support around the 167.00 area.
Looking ahead, Eurozone trade data for January and German ZEW economic sentiment index for March are due shortly.
The US CPI, building permits and housing starts - all for February may influence trading in the New York session.
