Pound Slides Amid Risk Aversion

The pound declined against its major counterparts in early European deals on Wednesday, as European shares fell on rising fears over a global trade war.

Trade worries persist after the U.S. House of Representatives overwhelmingly passed a bill to tighten foreign investment rules amid concerns over China's unfair trade and intellectual property practices.

The U.S. is set to publish restrictions on foreign investment in U.S. technology companies on Friday.

Meanwhile, China will assess the potential impact of the expected U.S. investment restrictions on Chinese companies, the Commerce ministry said in a brief statement.

Data from Nationwide Building Society showed that UK house prices increased at a slower pace in June.

House prices grew 2 percent year-on-year in June, following May's 2.4 percent increase. Nonetheless, the pace of increase was faster than the expected 1.7 percent.

The currency traded mixed against its major counterparts in the Asian session. While it fell against the euro and the yen, it held steady against the greenback and the franc.

The pound dropped to 2-day lows of 1.3066 against the Swiss franc and 144.81 against the yen, from yesterday's closing values of 1.3096 and 145.46, respectively. If the pound falls further, 1.29 and 143.00 are likely seen as its next support levels against the franc and the yen, respectively.

The U.K. currency that closed Tuesday's trading at 1.3218 against the greenback and 0.8808 against the euro declined to a 6-day low of 1.3189 and more than 2-week low of 0.8827, respectively. The next likely support for the pound is seen around 1.30 against the greenback and 0.90 against the euro.

Looking ahead, U.S. durable goods orders and wholesale inventories for May are scheduled for release in the New York session.