GBP to USD Exchange Rate remains firmer despite high US mortgage applications

The Pound held onto its earlier gains against the US Dollar as the morning’s better-than-forecast unemployment data buoyed the currency.

The ‘Greenback’ was unable to recover ground despite the release of data which showed that the Mortgage Bankers Association Index climbed to its best level in five months, easing some of the worries over the USA’s housing market.

The MBA Index increased by 10.3% in the week ending on June 6th, marking the biggest rise recorded since January 10th.

The refinancing gauge climbed 11 percent, also the strongest advance in five months, while the measure of purchase applications rose 9.3%, the biggest gain since the end of February. The share of applicants seeking to refinance climbed to 53.6% from 52.7% the prior week, today’s report showed.

The average rate on a 30-year fixed loan rose to 4.34 percent from the prior week’s 4.26%, which was the lowest since June 2013. The average rate on a 15-year mortgage increased to 3.43% from 3.39%.

Earlier in the session the Pound was buoyed by the publication of a report which showed that unemployment in the UK fell to a five-year low of 6.6%. The last time the unemployment rate was at such a level was at the end of 2009. It now means that the number of UK citizens out of work stands at 2.16 million.

Further gains were held in check however as the data also showed that wage growth fell to 0.7%, well below the 1.2% forecast by economists. It also means that wage growth has fallen below the 1.8% inflation rate.

Against the Euro the US Dollar was trading at its higher level in four months as the single currency remains under heavy pressure from last week’s European Central Bank monetary policy meeting.

The US was supported against the currency by higher Treasury yields.

Borrowing costs in the Eurozone have fallen in recent sessions due to diverging monetary policy between the ECB and the Federal Reserve, widening the yields between some Euro area government bonds and U.S. Treasuries.

US Dollar (USD) Exchange Rates