Pound Falls As U.K. Leadership Election Begins

The pound declined against its major opponents in the European session on Thursday, as the first round of voting of the U.K. leadership contest got underway, with investors cautious about the likelihood of a no-deal Brexit being pushed through by a future Prime Minister.

There are 10 candidates running in today's contest and voting will close at noon.

The former foreign secretary Boris Johnson is the favorite successor to May.

During his leadership campaign on Wednesday, Boris Johnson remarked that he was "not aiming for a no-deal outcome," although it was right to "prepare vigorously" for such an outcome.

Survey by the Royal Institution of Chartered Surveyors showed that UK house prices increased in May as the delay in Brexit helped to curb continuous fall in prices.

The house price balance rose more-than-expected to -10 percent in May from -22 percent in previous month. The balance was forecast to rise marginally to -21 percent.

The currency has been trading in a negative territory against its major counterparts in the Asian session, excepting the greenback.

The pound declined to 2-day lows of 1.2573 against the franc and 0.8920 against the euro, from its early highs of 1.2635 and 0.8880, respectively. On the downside, 1.23 and 0.90 are possibly seen as the next support levels for the pound against the franc and the euro, respectively.

Pulling away from its early highs of 1.2701 against the greenback and 137.75 against the yen, the U.K. currency weakened to a 3-day low of 1.2662 and a weekly low of 137.13, respectively. The pound is likely to find support around 1.24 against the greenback and 134.00 against the yen.

Looking ahead, the U.S. import and export prices for May and weekly jobless claims for the week ended June 8 will be out in the New York session.