Pound Drops Amid Risk Aversion
(RTTNews) - The pound weakened against its major counterparts in the European session on Wednesday amid risk aversion, as investors awaited the outcome of the U.S. midterm elections and inflation data.
Early results suggested the chance of Republicans attaining a majority in the U.S. House of Representatives.
The Associated Press reported that Republicans are leading in the tightly contested race to the Senate.
Such an outcome would lead to a split government and trigger political instability.
U.S. consumer inflation data is due on Thursday, which could shed more clues on the Fed's monetary policy tightening stance.
The pound touched 2-day lows of 1.1419 against the greenback and 166.50 against the yen, from its early highs of 1.1567 and 168.32, respectively. Next key support for the pound is likely seen around 1.11 against the greenback and 163.00 against the yen.
The pound reversed from its early highs of 1.1392 against the franc and 0.8715 against the euro and fell to a 5-day low of 1.1253 and a 4-week low of 0.8797, respectively. The currency may challenge support around 1.09 against the franc and 0.90 against the euro.
Looking ahead, U.S. wholesale inventories for September are due in the New York session.
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