FX ALERT: Pound Sterling (GBP) Gains Predicted as Homeowners Eyeball Bank of England Interest Rate Hike

August 20, 2015 - Written by Frank Davies

STORY LINK FX ALERT: Pound Sterling (GBP) Gains Predicted as Homeowners Eyeball Bank of England Interest Rate Hike

British Public Finance Data Forecast to Impact Pound Sterling Conversion Rate Trading

The British Pound edged lower against the Euro on Thursday and was trending in a narrow range against the US Dollar as the UK's retail sales report slightly disappointed forecasts. Today's UK public finance data could be a cause of further GBP/EUR and GBP/USD exchange rate movement.

Earlier...

UK House Price Data Impacts Pound Sterling (GBP) Exchange Rate Trading

Today’s session has brought the publication of further positive data from the property-related sectors of the UK economy. The tried and tested market adage asserts that what should go up, and doesn’t go up, can only come down... therefore does the fact that the Pound Sterling (currency : GBP) has given up ground against the majority of the other sixteen most actively traded global currencies signify an inherent weakness in the UK unit?

The Council of Mortgage Lenders (CML) issued official figures earlier today which revealed that the level of lending secured by UK homeowners against their properties during July had reached its highest level since the beginnings of the global credit crisis. The total level of borrowing by Britain’s property owners jumped to a whopping £22bn last month, with the CML forecasting increasing levels of lending during the final months of this year. The organisation’s economist Mohammed Jamei stated earlier that, ‘we expect lending activity in the rest of the year to be underpinned by improving economic fundamentals, but kept in check as any upward pressure on house prices further stretches affordability for some buyers.’ These comments are likely to stoke market whispers that the Bank of England (BoE) will be hiking its headline rate of interest sooner rather than later and this belief is likely to support the Pound into the medium term.

UK Home Construction Rises but GBP Lower against EUR, USD Exchange Rates

On a similar theme, official government figures published earlier showed a pronounced increase in the number of new properties being constructed in the UK. 131,060 new British homes were built in the year to the end of June – up 15% from the counterpart figure of a year ago. The more positive outlook for the domestic housing sector is likely to further support Sterling as we head towards the end of the year.

Oil Prices Drive Market Sentiment, AUD, NZD Conversion Rates Trend Lower

Elsewhere, investor sentiment was once again decidedly subdued during early trading today. Oil prices continued to track lower following a poor showing for Chinese equities overnight and European bourses shipped support as the markets digested the US Federal Reserves’ assertion of last night that America’s economy is not yet strong enough to withstand an interest rate hike.

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TAGS: Currency Predictions Daily Currency Updates Euro Forecasts