GBP Rises After Positive UK Housing and Confidence Data

The pound rose to a one-week high versus the dollar after reports showed U.K. home prices gained for a second month in October and consumer confidence increased.

U.K. government bonds climbed for the first time in three days as Barclays Plc pushed back its forecast for the Bank of England’s first interest-rate increase since 2007 to February from November. Minutes of BOE policy makers’ most recent meeting are set to be published on Oct. 22. A report two days later will show the British economy expanded for a seventh consecutive quarter, according to analysts surveyed by Bloomberg.

“It’s seeing a short-term resurgence,” Jeremy Stretch, head of foreign-exchange strategy at Canadian Imperial Bank of Commerce in London, said of the U.K. currency. “It’s a slightly more positive risk environment and I guess the underlying theme is still going to be data-driven.”

Sterling rose 0.3 percent to $1.6144 at 1:59 p.m. London time after touching $1.6151, the highest since Oct. 9. It fell to $1.5875 on Oct. 15, a level not seen since November. The pound strengthened 0.2 percent to 79.12 pence per euro.

Investors may sell the U.K. currency as it advances, according to Stretch, who doesn’t “see the justification for a squeeze higher to $1.62 or anything of that magnitude,” he said.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza