Sterling weakens on slow mortgage approvals

Story link: Sterling weakens on slow mortgage approvals

The US dollar gained on the yen and the euro on Wednesday after Tuesday’s news that the ISM survey of US manufacturing was at its highest point in nearly a year in April. The gain in manufacturing was unexpected, and some analysts counseled waiting for another month of results before declaring an end to slowdowns. Early gains for the dollar, however, were muted by a report of slower than anticipated growth in private sector unemployment in the US. By mid-afternoon in New York, the greenback had gained 0.1 percent on the euro to $1.3595, while it was up 0.3 percent to ¥120.10 versus the yen.

Sterling weakened on new figures showing that mortgage approvals in the UK were not up to predictions. Analysts said that they new data proved that recent interest rate hikes by the Bank of England are beginning to affect the housing market there. The consensus was that while the report likely means that the Bank will not raise interest rates by 50 basis points next week, but it was still considered a good bet that a 25-basis point hike is still to be expected. The UK currency dropped 0.3 percent in relation to the euro, to £0.6830, while it dropped 0.4 percent versus the US dollar to $1.9900.