Pound Rises Amid Risk Appetite

The pound climbed against its major counterparts in the European session on Tuesday amid risk appetite, as investors brushed aside trade worries and looked ahead to a strong quarterly earnings season.

Traders digested political turmoil in the U.K., as the resignation of Foreign Secretary Boris Johnson and Brexit minister David Davis put the British government into disarray.

Data from Office for National Statistics showed that U.K economic growth increased in May, led by services, while production declined.

GDP grew 0.3 percent month-on-month in May after the 0.2 percent increase in April and a flat reading in March.

Meanwhile, U.K. industrial production decreased for the third straight month in May, defying economists' forecast for an increase.

Industrial production fell 0.4 percent month-over-month in May, slower than April's revised 1.0 percent decline.

The UK visible trade deficit narrowed slightly in May, another data showed.

The trade in goods showed a shortfall of GBP 12.36 billion in May, down from GBP 12.40 billion in April. The expected deficit was GBP 12.0 billion.

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

The pound climbed to 1.3301 against the greenback, from a low of 1.3224 seen at 2:15 am ET. The pound is likely to find resistance around the 1.34 level.

The U.K. currency advanced to 147.77 against the yen, its strongest since June 14. The pound is seen finding resistance around the 149.00 level.

The pound edged up to 1.3194 against the Swiss franc, off its early low of 1.3125. The next possible resistance for the pound is seen around the 1.33 level.

Reversing from an early low of 0.8875 against the euro, the pound rose to 0.8828. If the pound continues its rise, 0.87 is possibly seen as its next resistance level.

Survey data from the Centre for European Economic Research showed that German investor confidence fell to its lowest level in nearly six years in July, as sentiment was hurt by political uncertainty.

The ZEW Indicator of Economic Sentiment for Germany dropped 8.6 points to minus 24.7 points, which was the lowest reading since August 2012.

Looking ahead, Canada housing starts for June and building permits for May are due in the New York session