(RTTNews) - The pound fell sharply against its key counterparts in early European deals on Wednesday after a report showed that U.K. economy entered into recession in the first quarter.
The U.K. economy unexpectedly contracted for the second straight time in the first quarter, the Office for National Statistics showed today.
Gross domestic product dropped 0.2 percent sequentially, while economists were forecasting a 0.1 percent expansion. That follows a 0.3 percent drop in the fourth quarter of 2011.
On a yearly basis, GDP remained flat in the first quarter. Economists had expected an annual 0.3 percent growth.
The pound touched new 1-week lows of 0.8212 against the euro and 1.4640 against the franc, compared to yesterday's close of 0.8176 and 1.4704, respectively. The next downside target level for the pound is seen at 0.825 against the euro and 1.46 against the franc.
Against the greenback, the pound fell to a 2-day low of 1.6088, compared to a new multi-month high of 1.6173 hit at 3:40 am ET. On the downside, the pound may target 1.605 level.
After touching a 2-day high of 131.70 against the yen in the previous session, the pound retreated shortly and fell to 130.57 in early European trading. If the pound slides further, it may target 130.00 level.
From the U.S., durable good orders for March are set for release. Also, FOMC will announce its interest rate decision at 2:30 pm ET. The U.S. Fed is widely expected to maintain interest rates at 0.25 percent.
