Pound Spikes Up As U.K. Mortgage Lending Rises To 7-year High
July 29 2015 - 7:46AM
RTTF2
The pound gained ground against its major rivals in European
deals on Wednesday, as U.K. mortgage approvals increased more than
expected in June and secured lending climbed most since 2008, in a
sign of accelerating housing market.
Data from the Bank of England showed that the number of loan
approvals for house purchase totaled 66,582 in June, up from 64,826
in May. It was forecast to increase marginally to 66,000.
Lending secured on dwellings increased GBP 2.6 billion versus
GBP 2.4 billion rise in May. This was the biggest monthly growth
since July 2008 and above GBP 2 billion growth forecast by
economists. It gained 0.2 percent from May and 1.9 percent from
last year.
The currency was also supported by rising European shares, which
were buoyed by some positive earnings reports in Europe, as well as
signs of stability in Chinese markets.
Investors' risk appetite has increased somewhat after Chinese
authorities hinted at more policy easing to boost liquidity and
pledged to buy shares to stabilize the market following record
losses earlier in the week.
Meanwhile, investors await the FOMC decision due tonight for
more insights about the timing of the Fed's first interest rate
hike in nearly a decade.
The pound performed in a mixed way in Asian trading. While the
pound held steady against the greenback and the yen, it dropped
against the euro and the franc.
In European trading now, the pound appreciated to a 5-day high
of 0.7060 against the euro, after having declined to 0.7098 at 9:45
pm ET. The pound is seen finding resistance around the 0.70 mark.
At Tuesday's close, the pair was valued at 0.7081.
Survey data from GfK showed that German consumer confidence is
set to stabilize in August.
The forward-looking consumer sentiment index came in at 10.1
points, unchanged from July. The score came in line with
expectations.
The pound remained higher against the franc, trading at 1.5038,
coming off from an early low of 1.4993. The next possible
resistance for the pound may be located around the 1.51 area. The
pair was worth 1.5021 when it ended Tuesday's trading.
The pound strengthened to 6-day highs of 193.55 versus the yen
and 1.5648 versus greenback, reversing from its prior lows of
192.56 and 1.5587, respectively. On the upside, the pound is likely
to eye resistance around 195.00 against the yen and 1.575 against
the greenback. The pound ended Tuesday's trading at 192.80 against
the yen and 1.5611 against the greenback.
In the New York session, U.S. pending home sales for June and
crude oil inventories report for the week ended July 24, are set to
be published.
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