The pound strengthened against its major counterparts in the Asian session on Monday amid risk appetite, as U.S. Treasury yields bounced back and the People’s Bank of China said it would use market-based reform methods to help lower real lending rates and prop up a slowing economy.
The PBoC said that reform to the loan prime rate mechanism would help fall interest rates further, thereby reducing the financing cost of enterprises.
Investors also cheered media reports suggesting that Germany’s coalition government may be open to running a fiscal deficit to counter a possible recession.
Data from property website Rightmove showed that UK house sales increased sharply in August as buyers insisted to conclude the contract well ahead of Brexit deadline.
Despite a quiet period in the property market, the number of sales advanced 6.1 percent year-on-year this August.
The pound strengthened to 129.51 against the yen from Friday’s closing value of 129.14. The next possible resistance for the pound is seen around the 132.00 level.
Data from the Ministry of Finance showed that Japan posted a merchandise trade deficit of 249.6 billion yen in July.
That missed expectations for a shortfall of 194.5 billion yen following the 589.5 billion yen deficit in June.
The pound edged higher to 1.2172 against the greenback, from a low of 1.2140 seen at 9:00 pm ET. The pound is seen finding resistance around the 1.27 level.
After a decline to 1.1874 against the Swiss franc at 5:45 pm ET, the pound reversed direction and rose to 1.1923. If the pound rises further, 1.21 is seen as its next resistance level.
The pound appreciated to 0.9112 against the euro, after falling to 0.9136 at 8:45 pm ET. The pound is likely to find resistance around the 0.90 level.
Looking ahead, Eurozone current account data for June and final consumer price index for July are due in the European session.
The material has been provided by InstaForex Company – www.instaforex.com