Pound Falls Amid Risk Aversion Following Brussels Blasts
The pound drifted lower against the other major currencies in European deals on Tuesday amid risk aversion, as investors became cautious after multiple explosions in Brussels left at least thirteen dead and thirty five injured.
Three were three explosions in Brussels, one at a subway station in the suburb of Maalbeek, while two explosions occurred at the city's airport.
The terror threat in Belgium was raised to its highest level.
Figures from the Office for National Statistics showed that U.K. inflation held steady in February and factory gate prices dropped less than expected.
Consumer prices gained 0.3 percent in February from a year ago as seen in January. Prices were expected to increase 0.4 percent.
Month-on-month, consumer prices rose 0.2 percent reversing January's 0.8 percent fall. Economists had forecast a 0.4 percent rise.
Separate data from the ONS showed that output prices dropped 1.1 percent after easing 1 percent in January. The decline was smaller than an expected fall of 1.2 percent.
At the same time, output prices gained 0.1 percent offsetting January's 0.1 percent drop. The pound showed mixed trading in Asian deals. While the pound rose against the greenback and the yen, it held steady against the euro and the franc.
The pound slid to 158.82 against yen, its lowest since March 2, from early 4-day high of 161.49. The pound is seen finding support around the 157.5 region.
The pound declined to 5-day lows of 1.4254 against the dollar and 0.7857 against the euro, compared to Monday's closing values of 1.4367 and 0.7823,respectively. If the pound extends slide, 1.40 against the greenback and 0.80 against the euro are possibly seen as its next support levels.
The pound fell to a new 3-week low of 1.3848 against the franc, compared to 1.3932 hit late New York Monday. Continuation of the pound's downtrend may lead it to a support around the 1.36 mark.
Data from the Federal Customs Administration showed that Switzerland's trade surplus increased further as exports recovered in February.
The trade surplus rose to a monthly record of CHF 4.1 billion from CHF 3.5 billion in January.
Looking ahead, U.S. house price index for January, Markit's U.S. manufacturing PMI and U.S. Richmond Fed manufacturing index, both for March, are slated for release in the New York session.
At 9:30 am ET, Bank of England's Monetary Policy Committee member Kristin Forbes is expected to speak at the Royal Economic Society annual conference, in Brighton.
At 4:00 pm ET, New Canadian Finance Minister Bill Morneau will present his first budget, focus on huge deficit needed to finance infrastructure spending, in Ottawa.
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