Pound to US Dollar (GBP/USD) Exchange Rate firms away from 5-week low following mixed US data

The Pound to US Dollar exchange rate firmed to 1.65 on Tuesday following the release of data which showed that the number of new home sales in the US fell to a five-month low in February, losses were limited however due to a separate report showing that consumer confidence rose in March.

Sterling regained ground against the ‘Greenback’ to push back above the key 1.65 level after a report released by the Washington based Commerce Department showed that the number of new homes sold in February dropped to the lowest level in five months suggesting that the US economy may take time to recover from the harsh winter weather.

“A lot of weakness is due to the weather and that effect should be getting over soon. We expect a moderate improvement in demand. Affordability will still be decent. The overall picture is positive, but I don’t want to suggest a surge in sales all of a sudden,” said a senior economist at 4cast Inc in an interview with Bloomberg.

Further gains by the Pound were limited however due to the release of another report. The Conference Board’s Index of consumer confidence in the US climbed to 82.3 this month, up from the previous month’s figure of 78.3.

Sterling also found support from inflation data that matched economist forecasts and a report which showed that house prices in the UK advanced by 6.8% in the 12 months leading to January, the figure was better than the 5.5% recorded in December and was the largest rise seen since August 2010.

Against the Euro the US Dollar strengthened as the European Central Bank attempted to talk down the currency and as a report showed that business confidence in Germany fell for the first time in five months this month.

The US could recover ground against the Pound on Wednesday if Markit’s Services PMI report beats economist expectations.

US Dollar (USD) Exchange Rates

[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,,Euro,0.7255 ,
US Dollar,, Pound Sterling,0.6054 ,
US Dollar,,Australian Dollar,1.0937 ,
US Dollar,,Canadian Dollar,1.1185 ,
Pound Sterling,,US Dollar,1.6510 ,

[/table]