With UK house prices surging by the most for a year and a half in May, the Pound was able to advance on its American counterpart as the European session began.
The Pound Sterling Exchange Rate was in the region of 1.5175 against the US Dollar as of 10:10 GMT
The annual increase in prices of 1.1 per cent was 0.2 per cent more than forecast.
Month-on-month UK home prices increased by 0.5 per cent, slightly less than expected but notably better than the stagnation recorded in April.
The Nationwide report intimated that the housing market is ‘gradually’ recovering. According to the building society’s chief economist Robert Gardner: ‘There has been an improvement in the availability and a reduction in the cost of credit, partly as a result of policy measures, such as the Funding for Lending Scheme. Indeed, mortgage prices have fallen back towards all time lows in recent months.’
The result allowed Sterling to strengthen modestly against the ‘Greenback’, clawing back above 1.5150.
In response to the figures one industry expert noted: ‘The recovery in the UK economy is patchy, but it’s gradually going in the right direction. I see the recovery in the housing market as a manifestation of that. The demand for Sterling should be well underpinned.’
The Pound could well post modest further gains in the hours ahead, as the Lloyds Business Barometer (which measures sentiment in the business sector) jumped from 27 in April to 39 in May.
However, the GBP/USD pairing could come under pressure this afternoon due to a stream of influential US economic data, including first quarter GDP and initial jobless claims. Further signs that the US economy is recovering will increase speculation surrounding the likelihood of the Federal Reserve starting to reduce its current level of easing, a circumstance which would boost the Dollar.
Current Pound Sterling (GBP) Exchange Rates:
< Down > Up
The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5175 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1694 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.5696 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.8706 >
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6590 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8551 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6369 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5348 <
(As of 10:10 GMT)
Comments are closed.