Pound weaker on house price speculation

Pound weaker on house price speculation

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The pound weakened in relation to the euro Friday on comments from a Bank of England deputy governor who said that house prices in the UK will continue to decline.

His comments made it seem less likely that the Bank’s Monetary Policy Committee will raise interest rates in the next few months and hurt consumer confidence in the UK.

In late morning trade in New York, the pound traded at 79.19p to the euro, but it had strengthened to $1.9751 to the US dollar as the greenback suffered a general weakening after last week’s gains.

The dollar was hurt by decreased expectations that the Federal Reserve will hike US interest rates after an analyst note said that the two largest mortgage-finance companies in the United States, Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), will likely see more losses as the housing market deteriorates further.

At late morning in New York, the dollar was trading at $1.5639 to the euro while it was also lower in relation to the yen, which traded at ¥107.3200.

The euro gained on the yen, to ¥167.8430 to the shared currency.

Both the Australian and New Zealand dollars were stronger in relation to the US dollar and the yen as interest rates in both nations are expected to remain higher than those in the US in the wake of reduced expectations of a rate hike in the US.

The US dollar traded at 95.51 cents US to the Australian dollar while it took ¥102.5013 to buy an Aussie, while the greenback traded at 76.26 cents US to the New Zealand dollar and the kiwi was worth ¥81.909.