The pound fell against its major counterparts in the European session on Tuesday, following comments from the Bank of England MPC member John Haskel suggesting that interest rates could rise more gradually.
Speaking to the Treasury select committee, incoming member Haskel said that the slack in the U.K. economy may be higher than currently examined.
“The first risk involved in raising interest rates would be if this is done too quickly, disturbing investment and borrowing plans by more than would have been expected,” he added.
Haskel cautioned over rising protectionism that could harm the UK economy by driving up costs and hurting economic demand.
Data from UK Finance showed that UK mortgage approvals increased to a four-month high in May.
The number of mortgage approvals increased to 39,244 in May from 38,327 in April. This was the highest since January and above the expected level of 38,250.
The currency rose against its major counterparts in the Asian session, with the exception of the euro.
The pound weakened to near a 2-week low of 0.8822 versus the euro, after having advanced to 0.8798 at 5:00 am ET. The pound is likely to find support around the 0.89 level.
Pulling away from an early 4-day high of 1.3292 against the greenback, the pound reversed direction and fell to a 5-day low of 1.3207. The next likely support for the pound is seen around the 1.31 level.
The pound edged down to 144.97 against the yen and 1.3067 against the franc, reversing from its early high of 145.77 and a 4-day high of 1.3123, respectively. If the pound falls further, 142.00 and 1.29 are likely seen as its next support levels against the yen and the franc, respectively.
Looking ahead, U.S. S&P/Case-Shiller home price index for April and consumer confidence index for June will be out in the New York session.