US Dollar Slows as UK House Prices Fall
Signs of Slowing US Dollar
The upward trend of the US Dollar paused momentarily yesterday as commodity prices caught up with its recent climb, eating into profit margins and giving other major currencies a chance to catch up.
After experiencing highs not seen for 6 months, yesterday the Dollar eased 0.1 per cent to $1.8645 against the Sterling and lost 0.3 per cent to Y110.10 against the Yen. This however, is expected to be a minor technicality with stabilization and mild growth to continue.
Pound Sinks to 2 Year Low
In contrast to the Dollar recovery, the Pound has struck a near two year low against the Dollar and the Euro.
Dropping for the 13th day in a row, the Pound had fallen 0.1 per cent to £0.7883 against the Euro yesterday prompting the British Chamber of Commerce to announce that recession for the UK remained a “distinct possibility”. Steve Barrow, a London based Research Executive at Standard Bank Plc, commentated to Bloomberg that the Pound will "probably go down to the $1.80 area" after having been recorded at $1.8552 by 8:30 a.m. in London today, from $1.8645 yesterday. The pound's 3% loss in the last week has been the longest 5 day decline since its nosedive in early July.
UK Housing Market Contracts
Latest data released from the housing sector has confirmed the economic slowdown and will exacerbate economic woes for business and individuals.
News this week that London average house prices are down 5.3% in August alone, has joined the miserable line up of statistics intensifying fears of recession. The enforcement of stricter lending criteria from banks has led to a lack of mortgage availability forcing a glut of unsold property.
Repercussions have been felt by homeowners and those in the construction industry which accounts for 9% of UK GDP. Amongst news of commodity price hikes, stratospheric inflation, unemployment and repossession rates, the housing market dive has led Ashley Seager of the Guardian to announce that "recession is already here".