The Pound has reached a six week high against the broadly weak US Dollar but remains at low levels against the Euro, failing as of yet to claim back significant ground on the single currency. The picture of the UK housing market continues to deteriorate with prices dropping the most in September in eighteen months according to a new Hometrack report. Speak with a broker or register an enquiry today to discuss any upcoming transfers.
Sterling was trading at the mid-market rate of 1.5814 against the US Dollar and 1.1749 against the Euro at 9.30am this morning.
Pound Sterling – UK Markets
Sterling has hit a six week high against the weak US Dollar but remains under pressure against the Euro before the first revision to second quarter GDP figures tomorrow.
New research by CBI and Pricewaterhouse Coopers has suggested that the UK banking sector is growing at its fastest rate since before the financial crisis with more than a third of banks increasing their business volumes over the last three months. The large increases in profits recorded by banks this year however are to be treated with caution, as growth is still slower than hoped for by some economists, who suggest that a further slow down could be seen once new regulations set in.
UK house prices refuse to stop falling and making headlines with the worsening figures being high on the news agenda every week. This week opens to data from Hometrack Ltd that UK home values dropped by the most in eighteen months in September with the average price now 0.4 percent lower than the previous month at 157,600 pounds. Housing demand is also at its weakest levels since January 2009 with this sector still being one of the most vulnerable sectors in the UK economy.
Following tomorrow’s GDP revision, Wednesday is the other key day for UK economic data with money supply and mortgage approval rates due.
US Dollar – US Markets
The US Dollar continues to suffer and has fallen against most major currencies as speculation rises that the Federal Reserve will revert to employing extra stimulus measures to shore up the economy. This follows uninspiring durable goods orders and flat housing market data at the tail end of last week.
The US is also revising its second quarter GDP figures on Thursday which will be closely scrutinised along with large amounts of economic data being released throughout the week.
Euro – European Markets
The Euro has broadly maintained last week’s strong position against other major currencies following a stronger than expected German business sentiment index. However, developments are due this week which may bring vulnerability to this strong position.
Ireland’s financial situation will continue to be under scrutiny as the Government is due to reveal the restructuring plans and final expenses of bailing out Anglo Irish Bank Corp by the 1st October. Whilst the state has pledged 22 billion euros for the bank, Standard & Poor’s have forecast that the final bill may total 35 billion euros, equal to 20 percent of GDP. Whether this will have an effect on the Euro will depend how well Ireland do in calming investor’s concerns that additional funding may be required.
Tomorrow however sees economic data from Germany on retail sales and the consumer price index which may well help support the Euro’s run as German data has been positive of late.
Other Currencies – Highlights
The latest Japanese export figures for August have revealed a sixth monthly decline in a row linked to the Yen’s rise against the Dollar. The threat of declining exports to the Japanese recovery is mounting with some suggesting there is a serious risk of a double dip recession putting pressure on Japanese officials to intervene to protect exports.
There has already been some speculation that the Government has taken steps to intervene and cool the appreciation of the Yen but nothing has been confirmed.
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