Pound Higher As U.K. Consumer Credit, Business Lending Improves
August 24 2016 - 05:56AM
RTTF2
The pound climbed against its key counterparts in European
trading on Wednesday, as data showing improvement in U.K. consumer
credit and business lending in July suggested that the Brexit vote
had little impact on borrowing patterns among consumers and
businesses.
Data from the British Bankers' Association showed that consumer
credit continued to show annual growth of over 6 percent,
reflecting strong retail sales and in the case of personal loans
and overdrafts favorable interest rates.
Business lending jumped by GBP 2.3 billion in the month, the
largest increase since January.
Meanwhile, U.K. mortgage approvals declined to the lowest level
since early 2015, with a slide to 37,662 in July from 39,763 in
June.
The pound showed mixed performance in Asian deals. While the
currency held steady against the euro and the franc, it declined
against the greenback. Against the yen, the pound rose.
The pound appreciated to 1.3254 against the greenback, its
highest since August 4. This marks a 0.4 percent increase from
yesterday's closing value of 1.3197. The pound is seen finding
resistance around the 1.34 mark.
Reversing from an early low of 1.2687 against the Swiss franc,
the pound advanced to a new 2-week high of 1.2820.On the upside,
the pound is likely to challenge resistance around the 1.30
level.
The pound drifted higher to a new 2-week high of 133.13 against
the Japanese yen, off its early low of 131.97. If the pound extends
rise, 135.00 is possibly seen as its next resistance level.
Figures from the Cabinet Office showed that Japan's leading
index, which measures the future economic activity, increased in
June instead of a stable reading reported initially.
The leading index rose to 99.2 in June from 98.4 in the previous
month. The June figure was revised up from 98.4.
The pound added 1 percent to hit a new 2-week high of 0.8492
against the euro, following a low of 0.8579 hit at 3:00 am ET.
Continuation of the pound's uptrend may see it challenging
resistance around the 0.83 area.
Data from Destatis showed that Germany's economy continued to
expand in the second quarter but the pace growth eased as
estimated.
Gross domestic product climbed 0.4 percent quarter-on-quarter,
in line with preliminary estimate, and slower than the 0.7 percent
expansion seen in the March quarter.
Looking ahead, U.S. existing home sales data for July and crude
oil inventories data are set to be published shortly.
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