Pound Euro Exchange Rate (GBP EUR) Recovers Slightly On Positive UK Housing Sector Report

Published: Tuesday, 12 March 2013 09:00 BST - Written by Frank Davies

STORY LINK Pound Euro Exchange Rate (GBP EUR) Recovers Slightly On Positive UK Housing Sector Report

There was more disappointing news from the eurozone yesterday afternoon, but the Pound euro exchange rate (currency : GBP EUR) still closed down on the day yesterday.

In a worrying development from Italy, the spectre of mainland Europe’s ‘elephant in the room’ re-entered the minds of investors with the news that the struggling Mediterranean nation’s sovereign debt had once again been downgraded. This time it was leading credit ratings agency Fitch which reduced its rating on Italian debt by a notch to BBB-plus. The development sent the rate of interest which Italy’s government pays to service its massive national debt up as high as 4.66%. However, the news failed to cause the GBP EUR exchange rate to improve any on the day; the pair was trading firmly within sight of its 16-month low by the end of yesterday’s European equities session.

However, the GBP EUR exchange rate has started today’s session slightly on the up thanks to UK housing sector data released during overnight trading. The closely-watched Royal Institute of Chartered Surveyors report of the state of the British housing market for last month revealed that the number of UK property transactions had hit their highest level since the latter part of 2010 during February. Although the average price paid for a UK property was almost unaltered from the month before, the report revealed that nearly 17 properties were sold for each surveyor operating in Britain during last month alone.

The remainder of today’s session is relatively devoid of risk events – the next data release of note comes tomorrow afternoon in the form of February’s Advance Retail Sales data in the US. Another strong set of American data could send the Pound US Dollar exchange rate (currency : GBP USD) down towards its key support at the 1.4230 level.

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