Data just released by the Royal Institute of Chartered Surveyors (RICS) suggests that downward pressure is beginning to be asserted on UK house prices. With a glut of houses on the market, some buyers are looking for (and finding) bargains. 44% of RICS members surveyed reported that prices had fallen over the last three months, but half reported that the value of property had remained stable and 1 in 20 noted a rise.
The message seems to be that if you want to sell your home, you need to be realistic about valuation and aware of the fact that there are fewer buyers in the UK market right now. At the moment, many RICS members are characterising the trend as a “correction” rather than anything more dramatic.
Pound Sterling – UK Markets
Sterling has been regaining some ground against the Euro over the past 24 hours, closing 0.1% higher yesterday at €1.1434. The trend has continued this morning and currently, £1 is worth €1.1461 (at 9:06 GMT).
A raft of UK data will be released later today which will reflect the consumer price index; trade balance; retail price index and the house price index amongst other figures. The consequences of government austerity measures should be starting to emerge in these data; indeed, the RICS survey noted that concern over the measures was affecting buyer confidence and suppressing the housing market already.
US Dollar – US Markets
The US Dollar is continuing to fall against the Yen, hitting fresh 15 year lows as it does so. Markets in both Japan and the USA were closed for holidays yesterday. The Dollar has strengthened marginally against both Sterling and the Euro over the past 24 hours.
In the States minutes from the Federal Open Market Committee (FOMC) will be released today. FOMC minutes offer a clear guide to US inflation rate policy.
Euro – European Markets
Germany is the economic powerhouse of Europe, so the fact that German exports had fallen for the second month in a row is unwelcome news. The Federal Statistics Office published data for August which showed that German exports had fallen by 0.4%. The single European currency has strengthened in recent months, following the crash caused by the sovereign debt crisis and the costlier Euro may be having an influence on German exports.
Data will be released later today on the German consumer price index and the wholesale goods index.
Other Currencies – Highlights
Poised to become the world’s second largest economy behind the USA, China has shown the best recovery from the global economic crisis with export growth figures which are more than ten times greater than her competitors. However, recently, both the USA and Europe have accused China of keeping the Chinese Yuan undervalued against other major currencies, thereby making Chinese exports artificially cheap. Whilst China acknowledges that it will allow the Yuan to appreciate, it has ruled out a swift revaluation and made it clear that US and European “interference” in the matter is unwelcome
Political Cracks in UK Hurt British Pound
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