The pound dropped against its major counterparts in European deals on Friday, as stronger-than-expected U.S. inflation data strengthened hopes for higher rates and weak China economic data pointed to persistent deflationary pressures in the world's second-largest economy.
China's exports and imports shrank at a slower pace for a second month in September, customs data showed earlier today.
Meanwhile, China's consumer inflation remained flat in September, while the producer price index fell 2.5 percent from a year earlier after a 3 percent drop in August, separate data revealed.
Investors were also spooked by comments from Bank of England Governor Andrew Bailey that future interest rate decisions by the central bank would continue to be tight.
Bailey added that there was solid progress in the fight against inflation, but there is still work left to do.
The pound fell to a 1-week low of 1.2159 against the greenback and a 3-day low of 181.91 against the yen, from its early highs of 1.2225 and 182.94, respectively. The next likely support for the pound is seen around 1.20 against the greenback and 176.00 against the yen.
The pound touched 1.1043 against the franc, setting a 5-1/2-month low. The currency may find downside target around the 0.99 level.
The pound was down 0.01 percent at 0.8643 against the euro. If the pound continues its fall, 0.88 is possibly seen as its next support level.
University of Michigan's consumer sentiment index for October and U.S. monthly budget statement for September will be published in the New York session.
