Pound Rises Amid Risk Appetite

The British pound strengthened against most major currencies in the early European session on Thursday amid risk appetite, as investor sentiment boosted after China's central bank assured markets that it is not trying to start a currency war.

At a press conference held this morning in Beijing, the People's Bank of China Assistant governor Zhang Xiaohui told that there was no basis for continued depreciation in the yuan. While pledging to improve the yuan's pricing mechanism, central bank officials dismissed speculation of a possible yuan drop of 10 percent as "groundless".

The U.K.'s FTSE 100 index is currently up 0.59 percent or 38.87 points at 6,610, France's CAC 40 index is down 1.57 percent or 77.50 points at 5,002 and Germany's DAX is down 1.14 percent or 124.57 points at 11,049.

Meanwhile, developments on Greece's third bailout is also closely watched, as the Greek parliament is due to meet later today to vote on the deal.

In the Asian trading today, the pound held steady against its major rivals.

In the European trading now, the pound rose to 0.7103 against the euro and 1.5291 against the Swiss franc, from early lows of 0.7156 and 1.5211, respectively. If the pound extends its uptrend, it is likely to find resistance around 0.70 against the euro and 1.54 against the franc.

Against the yen, the pound edged up to 194.74 from an early low of 193.87. On the upside, 196.00 is seen as the next resistance level for the pound.

Meanwhile, the pound fell to 1.5603 against the U.S. dollar from an early high of 1.5636. The pound may test support near the 1.54 area.

Looking ahead, the European Central Bank is set to publish the minutes of its July policy meeting at 7:30 am ET.

In the New York session, U.S. advance retail sales data for July, U.S. weekly jobless claims for the week ended August 8 and Canada new housing price index for June are slated for release.