Tuesday in early European deals, the pound dropped against other major currencies amid increasing concerns of nuclear disaster in Japan.
Risk aversion increased after news of another explosion at Fukushima Daichi nuclear plant in Japan, where the explosion was at it no.4 reactor, following radiation leaks from nuclear reactor no.2, and comments from Japanese Prime Minister Naoto Kan, urging people within a radius of 30 kilometers to stay indoors amid fears of more radiation leaks.
U.K. stocks opened lower and the benchmark FTSE 100 index is now trading at 5.689.82 – down 85.02 points or 1.5 percent over its previous close.
The pound slipped against the dollar in early European deals on Tuesday. As of now, the pound-dollar pair is worth 1.6060 with 1.604 seen as the next downside target level. At yesterday’s close, the pair was quoted at 1.6174.
During early European deals on Tuesday, the pound fell against the yen. At present, the pound-yen pair is worth 130.90, down from yesterday’s close of 132.03. If the UK currency weakens further, it may likely target the 129.7 level.
The pound declined against the Swiss franc in early European deals on Tuesday. The pound-franc pair is trading at more than a 2-month low of 1.4810, compared to 1.4952 hit late New York Monday. The next downside target level for the pound is seen at 1.470.
The pound that strengthened to a 4-day high of 0.8628 against the euro at 12:00 am ET Tuesday showed choppy trading thereafter, but the UK currency weakened after 3.30 am ET. Currently, the pound is worth 0.8672 per euro. On the downside, 0.869 is seen as the next target level for the pound. The euro-pound pair closed yesterday’s trading at 0.8654.
The Eurozone fourth quarter employment data and the German ZEW economic sentiment index for March are slated for release at 6:00 am ET.
From the U.S., import and export price indexes for February, results of the New York Federal Reserve’s empire state manufacturing survey for March, Treasury Department’s report on the flows of instruments into and out of the U.S. for January and NAHB housing market index for March are expected in the New York morning session.
The Federal Open Market Committee is scheduled to commence a 1-day meeting, with the central bank expected to make an announcement regarding its near-term direction of monetary policy at 2:15 pm ET.