Pound Rebounds As European Shares Edge Up

(RTTNews) - The pound recovered against its major counterparts in the European session on Friday amid risk appetite, as investors cheered signs of more stimulus from Beijing and data showing that the downturn in euro zone manufacturing eased last month.

The Eurozone manufacturing PMI increased to a three-month high of 43.50 points in August from 42.70 points in July of 2023.

Major Chinese banks slashed interest rates on a range of deposits as part of measures to boost economic growth.

The People's Bank of China said it would cut foreign exchange reserve requirement ratio for financial institutions in a bid to boost liquidity and shore up the yuan.

Data from the Nationwide Building Society showed that U.K. house prices declined at the fastest pace in more than 14 years in August as rising borrowing costs continue to dampen housing market activity.

House prices posted an annual decline of 5.3 percent after easing 3.8 percent in July. This was the biggest fall since July 2009 and also larger than economists' forecast of 3.9 percent fall.

The pound rose to 1.2689 against the greenback and 184.55 against the yen, from an early 2-day low of 1.2639 and a 4-day low of 184.04, respectively. The pound is seen facing resistance around 1.28 against the greenback and 186.00 against the yen.

The pound recovered to 1.1196 against the franc, off an early low of 1.1161. The pound may challenge resistance around the 1.13 level.

Against the euro, the pound climbed to an 8-day high of 0.8550. If the currency rises further, 0.84 is likely seen as its next upside target level.

Looking ahead, U.S. jobs data and ISM manufacturing PMI for August and construction spending for July, as well as Canada GDP data for the second quarter will be released in the New York session.