Pound Slides Amid Risk Aversion

The British pound weakened against the other major currencies in the early European session on Friday amid risk aversion, after U.S. shares fell the most in three weeks overnight on the back of disappointing data and weak corporate earnings.

The U.K.'s FTSE 100 index is currently down 0.87 percent or 55.11 points at 6,267, France's CAC 40 index is down 0.28 percent or 71.31 points at 4,486 and Germany's DAX is down 1.31 percent or 134.85 points at 10,186.

Oil prices dropped on the back of a weak dollar in the wake of a disappointing report on U.S. first-quarter GDP growth.

In other economic news, data from the Bank of England showed that the U.K. mortgage approvals declined to a 3-month low in March, while secured lending and consumer credit expanded strongly.The number of mortgages approved in March fell unexpectedly to 71,357 from 73,195 in February. It was forecast to rise to 74,200.

Total lending to individuals increased by GBP 9.3 billion in March, much bigger than a GBP 5 billion rise seen in February.

In March, M4 money supply slid 0.4 percent on a monthly basis, which was the first fall in three months. In February, M4 had increased 0.9 percent. Year-on-year, growth eased to 1.6 percent from 2.2 percent.

In the Asian trading today, the pound traded higher against its major rivals.

In the early European trading, the British pound fell to a 9-day low of 156.28 against the yen, from an early high of 158.06. The pound may test support near the 152.00 region.

The pound dropped to 1.4596 against the U.S. dollar, from an early near 3-month high of 1.4664. On the downside, 1.43 is seen as the next support level for the pound.

Against the euro and the Swiss franc, the pound edged down to 0.7796 and 1.4059 from early highs of 0.7764 and 1.4131, respectively. If the pound extends its downtrend, it is likely to find support around 0.79 the euro and 1.37 against the franc.

Looking ahead, preliminary eurozone GDP data for the first quarter and eurozone unemployment data for March are slated for release later in the day.

In the New York session, Canada GDP data for February, industrial product and raw materials price indexes for March, U.S. personal income and spending data for March, U.S. Chicago PMI for April and the University of Michigan's final U.S. consumer sentiment index for April are set to be published.