Pound Weakens In Cautious Trade

The pound declined against its most major counterparts in the European session on Friday, as hawkish comments from a policymaker of the European Central Bank overshadowed optimism over slower rate hikes from the Federal Reserve.

ECB's Executive Board member Isabel Schnabel said on Thursday that "incoming data so far suggest that the room for slowing down the pace of rate adjustments remains limited".

China's daily COVID infections jumped above 30,000 on Thursday, with officials imposing community lockdowns in several cities.

Investors digested German GDP data for the third quarter and GfK consumer confidence index for December.

Trading volumes were thin with the U.S. stock markets closing early on account of Black Friday.

The pound declined to 1.2072 against the greenback and 1.1407 against the franc, off its prior highs of 1.2128 and 1.1453, respectively. The next possible support for the pound is seen around 1.18 against the greenback and 1.12 against the franc. The pound edged down to 0.8616 against the euro, pulling back from a previous high of 0.8583. The pound is seen finding support around the 0.875 level.

In contrast, the pound rose against the yen, hitting a 2-day high of 168.70. If the pound rises further, it may find resistance around the 170.00 level.