Pound Falls Amid Risk Aversion

The British pound weakened against the other major currencies in the early European session on Friday, as European stock markets fell after media reports suggested that U.S. President Donald Trump may not take action on his proposed $550 billion infrastructure promise until 2018.

Meanwhile, market participants assessed the risk of delay in fiscal stimulus spending.

The U.K.'s FTSE 100 index is currently down 0.34 percent or 24.84 points at 7,246, France's CAC 40 index is down 0.54 percent or 26.20 points at 4,865 and Germany's DAX is down 0.33 percent or 39.31 points at 11,908.

In an interview with CNBC on Thursday, U.S. Treasury Secretary Steven Mnuchin said that the U.S. administration is committed to passing a tax reform plan by the August recess, in what could prove a tough task as lawmakers work through a complex agenda.

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

In the European trading, the pound fell to 1.2524 against the U.S. dollar, from an early more than a 2-week high of 1.2569. The pound may test support near the 1.23 region.

Against the yen, the euro and the Swiss franc, the pound dropped to 140.85, 0.8451 and 1.2595 from an early 2-day highs of 141.77, 0.8422 and 1.2645, respectively. If the pound extends its downtrend, it is likely to find support around 137.00 against the yen, 0.86 against the euro and 1.24 against the franc.

Looking ahead, Canada CPI data for January, U.S. new home sales data for January, U.S. University of Michigan final consumer sentiment index for February and U.S. Baker Hughes rig count data are set to be announced in the New York session.