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Pound Falls After U.K. Nationwide House Prices, Consumer Confidence Index

06:57, 31st July 2014

(RTTNews) - The pound drifted lower against its major counterparts in European deals on Thursday, after reports showed that U.K. house price growth slowed and consumer confidence index fell to a 6-month low in July.

The survey data from Nationwide showed that U.K. house prices rose less-than-expected in July.

On month, house prices grew at its slowest pace since April 2013, up 0.1 percent in July. This was notably slower than the 1 percent increase in June and the 0.5 percent growth expected by economists.

House prices rose 10.6 percent year-over-year in July, following a 11.8 percent gain in June. This was less than the 11.3 percent rise expected by economists.

Consumer confidence in the United Kingdom took a hit in July, with an index score of -2, according to a research firm GfK.

That was well shy of forecasts for +2, and it was down from +1 in June.

The Bank of England Deputy Governor Ben Broadbent said that the pound's strength may have a protracted impact on inflation, while also harming growth.

"The weak global outlook relative to the U.K. is the key driver," Broadbent said in an interview with Bloomberg. Pound's re-appreciation seen since last year is mainly due to weak global fundamentals, which is a matter of concern, he added.

The pound depreciated to 1.6869 against the greenback, a level unseen since June 12. At yesterday's close, the pair was worth 1.6911. If the pound continues its downtrend, 1.68 is seen as its next possible support level.

The pound lost 0.3 percent to hit a new 2-week low of 0.7941 against the euro. On the downside, 0.80 is seen as next possible downside target level for the pound. The pair ended yesterday's trading at 0.7919.

Eurozone inflation slowed in July to the lowest in four-and-a-half years largely due to a fall in energy prices, data showed.

Inflation slowed to 0.4 percent in July from 0.5 percent in June, flash data from Eurostat revealed. It was expected to remain unchanged at 0.5 percent.

The pound, which ended Wednesday's trading at 1.5368 against the Swiss franc, moved down to a 6-day low of 1.5316. Next likely support for the pound lies around the 1.52 mark.

The pound retreated to 173.39 against the yen, from an early high of 173.98. The pound is likely to seek support around the 172.5 region. At Wednesday's close, the pair was worth 173.83.

Japan's housing starts declined less than expected in June, data revealed.

Housing starts dropped 9.5 percent year-over-year in June, a slower rate of decline than the 15 percent fall in May, the Ministry of Land, Infrastructure, Transport and Tourism said.

Looking ahead, Canada GDP data for May and U.S. weekly jobless claims for the week ended July 26 are due in the New York session.

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