Before the release of this morning’s UK data the Pound continued to trade within reach of a six-week high against the Euro and was largely unchanged against the US Dollar. However, Sterling could experience movement this morning in response to news that UK mortgage approvals dropped by more than forecast and manufacturing PMI contracted for a second month.
The Pound Sterling Exchange Rate was in the region of 1.1866 against the Euro as of 10:00 am
According to figures compiled by the Bank of England, mortgage approvals slid from 54,187 in January to 51,653 in February, the lowest figure since September 2012.
Although economists had anticipated a decline, the result was significantly lower than their estimate of 53,700.
Prior to the report’s publication economist Howard Archer commented: ‘House prices may very well eke out a small gain over 2013 supported by modestly increased activity, but it seems unlikely that they will make a decisive move upward. Periodic slips in house prices remain highly possible.’
Today’s result reiterates comments made by Nationwide Building Society regarding the ‘uncertain’ UK housing market.
Meanwhile, a separate report issued by Markit Economics and the Chartered Institute of Purchasing and Supply revealed that UK manufacturing contracted for a second month in March.
Although Markit’s gauge rose from 47.9 to 48.3 it remains below the 50 mark which separates growth from contraction. The increase was also 0.4 less than estimated by economists participating in a survey for Bloomberg News.
Immediately following the UK data Sterling slipped slightly against the US Dollar.
However, disappointing news from the Eurozone could limit any losses in the GBP/EUR pairing.
The latest figures have shown that the unemployment rate in the Eurozone stands at a record 12 per cent.
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