Pound Euro GBP/EUR Exchange Rate Forecast To Gain On Positive UK House Price Data

March 24, 2014 - Written by John Cameron

STORY LINK Pound Euro GBP/EUR Exchange Rate Forecast To Gain On Positive UK House Price Data

The major interest at the end of last week for market participants holding Pound Sterling denominated assets came in the form of a raft of British housing market data and related commentary. Headlining the information flow was Friday’s revelation from the coalition government that over 17,000 homes had been bought with the assistance of the controversial ‘Help To Buy’ scheme during the nine months since its inception. The vast majority of those taking advantage of the programme were first time buyers – the lifeblood which keeps property prices moving Northwards.

The UK Prime Minister was quick to praise the policy following the news, however not everyone remains convinced of the merits of the scheme which provides an interest free loan allowing purchasers with a smaller deposit to get on the British property ladder. A notable naysayer was former Bank of England monetary policy committee member Adam Posen who dismissed the initiative as ‘largely mistaken’ observing that, ‘the idea of pumping up credit for middle to upper-middle class people to spend more on housing, when people have already spent too much on housing, is dysfunctional.’

Meanwhile, official HM Revenue & Customs data re-enforced the impression that the British property market is building up a head of steam, disclosing that the level of purchases last month was 84,950, significantly up from February 2013’s counterpart showing of 64,270. Investors hoping for a Sterling rally in response to these releases were disappointed – the Pound euro exchange rate ended the week trading in the middle part of the 1.1900 – 1.2000 GBP/EUR range, while the Pound Dollar exchange rate put in a similarly lacklustre showing, closing on Friday at just below the 1.6500 GBP/USD level – significantly down from where it had started the weekly session.

Market participants looking for clues as to why the Pound once again failed to trade into positive territory against the Greenback and the single currency need look no further than Friday morning’s UK Public Sector Borrowing data which, for the second month on the trot, showed that the government had repaid a smaller than expected chunk of its vast national debt.

Key Pound Sterling / Euro Exchange Rates (Publish: 9AM GMT 24/03/2014)

The Pound Sterling to Euro exchange rate is trading down -0.04% at 1.19496 GBP/EUR.
The Pound Sterling to US Dollar exchange rate is trading up +0.01% at 1.64954 GBP/USD.
The Euro to Pound Sterling exchange rate is trading up +0.04% at 0.83684 EUR/GBP.
The Euro to US Dollar exchange rate is trading up +0.05% at 1.38041 EUR/USD.
The US Dollar to Euro exchange rate is trading down -0.05% at 0.72443 USD/EUR.
The US Dollar to Pound Sterling exchange rate is trading down -0.01% at 0.60623 USD/GBP.

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