Sterling jumped to session highs against the US dollar on Monday, following the positive set of economic data, which came out minutes ago from the United Kingdom.
GBP/USD hit 1.5245 at 8:45 GMT, currently the session high, after which consolidation followed at 1.5238. The cross gained 0.17% for the day. Support was expected at current session low, 1.5180, while resistance was to be met at June 27th high, 1.5345.
Earlier on Monday it was reported that Manufacturing CIPS (The Chartered Institute of Purchasing and Supply) indicator in UK rose to 52.5 in June, surpassing expectations of a reading of 51.0, while revised data during May showed a value of 51.5. This result signaled that economic recovery was gaining momentum. Comprising elements of the index showed that revitalization of the manufacturing sector in the UK could continue. Concerns about UK economy in a longer term, however, remained, as employment in the sector was still stagnating.
Bank of England (BoE) reported that Mortgage Approvals in the United Kingdom reached a number of 58 200 in May, far above the projected 54 800. During the preceding month the number of approved mortgages was revised up to 54 400 from 53 710 previously. This was the highest recorded number of mortgages for about three-and-a-half years. Results imply that continuing efforts to put an end to household lending stagnation in the United Kingdom, have begun to pay off. On the other hand, lending towards business entities remained on lower levels for now. Some experts, however, have criticized pro-lending initiatives by the UK government and BoE as being risky and leading to a potential house price bubble.
Net Consumer Credit amounted at 0.7 billion GBP in May in line with preliminary estimates and increasing in comparison with the previous month, when the indicator stated a value of 0.6 billion GBP, a revision up from 0.5 billion GBP previously. Additionally, Net Lending Secured on Dwellings recorded a value of 0.3 billion GBP in May, which did not meet expectations (0.9 billion GBP) and slowed down in comparison with the result, registered a month ago, 0.7 billion GBP, according to revised data.
In the mean time, US dollar was receiving ongoing support as a result of expectations that the Federal Reserve Bank will soon begin to scale back its Quantitative Easing. Market players were also looking forward to Friday’s non-farm payrolls report. Additionally, later on Monday the ISM was to release information on US manufacturing activity. Positive numbers will favor further boost of demand for the greenback.
Pound remained almost without change against the euro, as EUR/GBP slipped 0.01% to 0.8554.
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