Pound Drops On Tariff Concerns
(RTTNews) - The pound fell against its major counterparts in the New York session on Monday, amid rising trade tensions due to China and the U.S. accusing each other of violating trade agreement, and the Trump administration's announcement that it would double the tariffs on steel and aluminum imports to 50% from June 4th.
Trump has announced that import tariffs on steel and aluminum will double to 50 percent starting June 4, in what he called a move to protect domestic industry.
China has accused the U.S. of violating their recent trade deal and vowed to take measures to defend its interests, dimming the prospect of an immediate leadership call that Trump wants to have to further bilateral talks.
On the economic front, the UK factory sector shrank further in May as the weak global demand, trade tensions and rising cost burdens weighed on production and new orders, the purchasing managers' survey results from S&P Global showed.
The final manufacturing PMI rose to a three-month high of 46.4 in May from 45.4 in April. The reading was also above the flash estimate of 45.1. However, the score remained well below the neutral level of 50.0, suggesting contraction.
The pound fell to near 2-week lows of 0.8449 against the euro and 1.1049 against the franc. The next possible support for the currency is seen around 0.86 against the euro and 1.09 against the franc.
The pound dropped to a 1-week low of 193.00 against the yen. If the currency falls further, it is likely to test support around the 190.00 region.
The pound retreated to 1.3516 against the greenback, from an early 6-day high of 1.3559. The currency may find support around the 1.31 level.
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