The Pound softened against the Euro and US Dollar on Monday after it was weighed upon by the release of weaker-than-expected mortgage approvals data.
According to data released by the Bank of England UK mortgage approvals declined more-than-forecast in May to the lowest level in almost a year. The report raises the probability that the UK housing market is beginning to cool down.
The number of mortgages approved dropped from the 62,806 seen in April to 61,707 in May, below economist expectations for a figure of 61,800. The cooling market will be seen as a good thing by the Bank of England as BoE Governor Mark
Carney recently highlighted the property market as the major risk to the UK’s economic recovery.
A separate report showed that mortgage lending rose by a stronger-than-expected £1.988 billion in May, its biggest increase since July 2008, and in the three months to May it rose at an annualised rate of 1.7%, its fastest growth rate since
September 2008. The rise is thought to be as a result of rising and record high house prices.
Last week BoE governor Carney announced new measures to try and curb rising debt levels and allow wages to catch up with house prices.
Against the Australian and New Zealand Dollars the Pound was trading higher as both South Pacific currencies were weighed upon by weaker than forecast domestic data and reduced demand for riskier assets due to the situations in Iraq, Ukraine and North Korea.
Sterling could recover ground on Tuesday if the latest Markit/CIPs Manufacturing PMI report comes in strongly.
Key GBP events for the week ahead:
Tuesday July 1st – Markit/CIPS Manufacturing PMI
Wednesday July 2nd – Construction PMI
Thursday July 3rd – Markit/CIPS UK Services PMI
Pound (GBP) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,US Dollar,1.7019 ,
Pound Sterling,,Euro,1.2462 ,
Pound Sterling,,Australian Dollar,1.8108 ,
Pound Sterling,,New Zealand Dollar,1.9473 ,
US Dollar,,Pound Sterling,0.5877 ,
Euro,, Pound Sterling ,0.8025 ,
Australian Dollar,, Pound Sterling ,0.5525 ,
New Zealand Dollar,,Pound Sterling,0.5135 ,
[/table]
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