British Pound (GBP) Exchange Rate: Sterling Restrained Before Wednesday’s UK Employment Figures
The British Pound was trading in a fairly narrow range against several of its major currency counterparts as a new week got under way.
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Sterling was little-changed on Monday following the release of a UK Rightmove house value report.
The data showed that domestic home values increased by 1.6 per cent in March, month-on-month, following the monthly increase of 3.3 per cent in February.
On the year house prices were up 6.8 per cent.
Home values in London are now at an all time high, with asking prices in the capital advancing by 2.1 per cent last month to 552,530 Pounds.
Rightmove director Miles Shipside said of the result; ‘Spring is in the air and the country is finally on the move. The mass property market is starting to unlock after years of being handcuffed by fragile consumer confidence and a lack of low-deposit mortgages’.
Key events for the week ahead
Bank of England Minutes (March 19)
Jobless Claims Change (March 19)
ILO Unemployment Rate (March 19)
As national house prices are now above the 250,000 Pound threshold for higher stamp duty tax, Shipside commented; ‘Depending on the Chancellor’s need to balance the books versus the desire to please target voters, he may be tempted to make some further tax changes. Stamp duty has unfair thresholds, and a buoyant market could withstand some tinkering’.
Although Sterling was barely affected by today’s UK data, the currency was able to strengthen against the Euro as the common currency struggled following the release of a disappointing inflation report for the Eurozone.
Later today US industrial/manufacturing production reports could trigger some Pound to US Dollar (GBP/USD) exchange rate movement.
This week the main cause of Pound volatility is likely to be Wednesday’s UK employment figures.
Economists have forecast that the unemployment rate held at 7.2 per cent in the three months to January as the economy added 110,000 positions.
A surprising result could spark major Pound fluctuations
Recent UK PMI reports have indicated that employment improved in February, so a better-than-forecast jobs gain is possible and Pound strength could follow.
Investors will also be paying close attention to the content of minutes from the Bank of England’s latest policy meeting.
As the week continues the announcement of the UK budget and public sector net borrowing figures could also influence the direction taken by Sterling.
The Pound is currently trading against the Euro in the region of 1.1962 and trading against the US Dollar in the region of 1.6610.