Nationwide house price data shows big fall
UK mortgage approvals under forecast
Sterling weaker vs. USD but gains against euro
German unemployment change –18k
The pound has lost more ground against the USD this morning trading back into 1.58 but has managed to move to the higher end of 1.19 vs. the euro. Nationwide released negative data on the housing front early this morning with the number showing the sharpest monthly fall in two years, bringing another bit of gloomy economic news after yesterday’s weaker GDP. The last two days have helped remind investors over the continuing fragile state of the UK economy once again stemming any long lasting gains for the pound against the USD. In most recent data UK mortgage approvals came out lower than expected although net lending to individuals rose slightly to 1.6B from 1.5B forecast. Sterling may well take advantage of risk appetite in the coming weeks but the threat of further QE has intensified in recent days.
The Euro has fallen by over a quarter of one percent against the USD and pound this morning after trading strongly in the early part of this week. Investors remain jittery over the single currency and today traders will be paying attention to announcements that come out of the euro zone, particularly over the current debt situation in Portugal which is widely seen as the next country needing to restructure it’s debt. Any negative news surrounding this and the euro zone as a whole is likely to see more selling of the single currency.
The USD has made some gains against the riskier pound and Euro this morning after initially loosing out this week. The “greenback” has been aided by stronger economic data released yesterday with Core Durable Goods coming out better than expected. This afternoon’s unemployment claims is likely to be the main focus for the US economy which has seen steady gains in recent months helping to contribute to more optimism over a recovery. If this figure comes out at 315k or lower we could well see further support for the US currency.