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Pound Drops Amid Risk Aversion

The British pound weakened against other major currencies in the European session on Friday, as U.S. President Donald Trump's rhetoric on North Korea over the past few days made investors risk averse.

The U.K.'s FTSE 100 index is currently down 1.15 percent or 84.85 points at 7,305, France's CAC 40 index is down 1.16 percent or 59.21 points at 5,056 and Germany's DAX is down 0.54 percent or 64.44 points at 11,949.

Commodity-related stocks were among the worst performers against the backdrop of heightened political uncertainty after Trump further ratcheted up the rhetoric, suggesting that his "fire and fury" comments may not have been tough enough.

The president said "things will happen to them they never thought possible" should Pyongyang attack the United States or its allies.

In the Asian trading today, the pound had risen against its major rivals.

In the European trading, the pound fell to nearly a 2-month high of 141.26 against the yen and more than a 2-week high of 1.2452 against the Swiss franc, from early highs of 141.87 and 1.2501, respectively. If the pound extends its downtrend, it is likely to find support around 139.00 against the yen and 1.22 against the franc.

Against the euro and the U.S. dollar, the pound dropped to 0.9069 and 1.2968, from early highs of 0.9051 and 1.2999, respectively. The pound may test support near 0.91 against the euro and 1.27 against the greenback.

Looking ahead, U.S. CPI for July and U.S. Baker Hughes rig count data are due to be released in the New York session.

At 9:40 am ET, Federal Reserve Bank of Dallas President Robert Kaplan is expected to speak about economic conditions and monetary policy at an annual continuing education event for accounting professionals, in Arlington.

At 11:30 am ET, Federal Reserve Bank of Minneapolis President Neel Kashkari is expected to speak at the Independent Community Bankers of Minnesota Annual Convention.

by RTTNews Staff Writer

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