GBP EUR Forecast: UK Mortgage Approvals Could Send Pound Euro Exchange Rate up

Modified: Monday, 28 October 2013 16:04 BST - Written by James Fuller

STORY LINK GBP EUR Forecast: UK Mortgage Approvals Could Send Pound Euro Exchange Rate up

Pound Sterling gave up early gains against the Yen during the first half of today’s European session thanks to a brace of uninspiring UK data releases. Tomorrow’s UK mortgage data will determine the near-term trajectory for the Pound.

The Pound to Euro exchange rate (GBP/EUR) is currently trading up by 0.04% at 1.1718 GBP/EUR. The Euro to Pound exchange rate is currently trading at 0.8534 EUR/GBP.

Today’s session has been marked by a distinct lack of movement for the major global currency pairs. The Japanese Yen leaked support during the early part of the day as investors continued to fret about the future direction of the Bank of Japan’s monetary policy. The move against the Japanese tender sent the Pound Yen exchange rate (GBP/JPY) up to as high as 158.31 earlier. However, losses for the Yen proved to be short-lived – when trading began in London’s equities markets and Europe’s bourses earlier today the prevailing mood amongst investors was ‘risk off’ meaning that the Japanese unit came in for some sustained safe haven support which sent GBP JPY back down into the mid-157s once more.

Today’s trading day has brought a decidedly mixed bag of UK data releases. The Confederation of British Industry’s latest report of domestic shop sales, published this morning, revealed that October had brought hardly any increase in spending from Britain’s shoppers. Analysts had been anticipating a showing of 34, signifying a healthy level of growth, so the print of 2 came as a blow to investors holding Sterling-denominated assets.

Meanwhile, this morning’s UK housing data from the Land Registry showed that, contrary to the conventional wisdom amongst investors, UK property prices are rising at a pace which is barely above general inflation. The annualised showing of 3.4% hardly represents the early slopes of a new housing boom which some commentators would have you believe.

Looking ahead, tomorrow morning’s UK Mortgage Approvals data for last month is likely to give the Pound further near-term direction. A print of above the anticipated 66,000 is likely to benefit Sterling, sending the Pound euro exchange rate (GBP/EUR) up towards its next level of key resistance on the upside which comes at 1.2000.

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