Join our community of traders FOR FREE!

  • Learn
  • Improve yourself
  • Get Rewards
Learn More

The UK pound rebounded from the lowest level in a month against the US dollar, after data showed a gauge of UK house prices advanced the most in six years this month.

GBP/USD hit a session high at 1.6453 at 09:10 GMT, after which consolidation followed at 1.6448, adding 0.17% for the day. Support was likely to be received at January 17th low, also the pairs weakest level since December 18th, while resistance was to be encountered at January 17th high, 1.6458.

According to data by the property company Rightmotive Plc., the average asking prices in UK soared by an annualized rate of 6.3% in January, the largest advance since November 2007. On monthly basis, the average asking prices rose by 1.0% this month, after declining 1.9% in December.

The pound rebounded from one-month lows against the US dollar on Friday after a report by the UK Office for National Statistics. Data showed the nation’s retail sales advanced at the fastest pace since June 2008, soaring by 2.6% in December or 8 times higher than the median analyst’ forecast of a 0.3% increase. The retail sales in November were revised downwards from 0.3% to 0.1%. On annual basis, UK retail sales surged by 5.3% in December, while analysts had expected the retail sales will increase by 2.5%. In November, retail sales were revised downwards to 1.8% from 2%

Data also showed that the core retail sales, or those excluding sales of automobiles and fuel, which tend to be volatile, increased by 2.8% in December, outstripping analysts’ forecasts of a 0.3% increase. On annual basis the core retail sales soared by 6.1%, while analysts had predicted a smaller gain of 3.2%.

The retail sales and core retail sales can be regarded as leading indicators of consumer spending, which accounts for the majority of the overall economic activity.

Investors awaited minutes of Bank of Englands policy meeting in January, which is scheduled for release on Wednesday. On the same day a separate government report may show UK unemployment declined towards BoEs target of 7%, which will be used as a benchmark for raising interest rates.

According to a Bloomberg survey, the jobless rate probably fell to 7.3% in the three months through November, from 7.4% in the quarter through October.

Meanwhile, US markets are to remain closed due to a national holiday.

A series of overall upbeat data provided signs that US economic growth is accelerating and recovery seemed sustainable. US home construction slowed less than analysts had projected, while industrial output expanded for a fifth consecutive month. Only the consumer sentiment came at a lower-than-expected reading in January, but this was not enough to change the overall market consensus that Fed will continue tapering throughout 2014.

A report by the US Commerce Department on Friday, showed that housing starts decreased 9.8% to 999 000 annualized rate in December, after they have been revised to 1.11 million pace in the previous month, the strongest figure since November 2007. Analysts had expected that housing starts will decline to 985 000 in December. Building permits fell by 3% to a 986 000 pace.

Last year, builders began constructing 923 400 homes, which is 18.3% higher than a year ago and is the largest number since 2007, when 1.36 million houses were constructed.

At the same time, industrial production in the United States rose 0.3% in December on a monthly basis, in line with expectations, supported by overall recovery in manufacturing and mining sectors. On annual basis, industrial output expanded 3.7% in December, or 0.9% higher than the peak registered before the global recession. November’s result has been revised down to a 1.0% increase from 1.1% gain previously. In October and September, however, nation’s industrial production has been moderately revised up.

The US dollar was slightly pressured, following the release of a worse-than-expected consumer sentiment data in January. January’s preliminary reading of the Thomson Reuters/University of Michigan consumer sentiment index registered at 80.4, defying analysts’ projections for an advance to 83.5 from December’s final reading of 82.5.

Overall, the reports provided support to greenback’s demand, as they favored the view that the Federal Reserve Bank may continue tapering during the year. Central bank’s policy makers said on December 18th that they will reduce monthly asset purchases to $75 billion from $85 billion, underscoring improving labor market conditions.

The bank will probably continue to pare stimulus by $10 billion at each policy meeting before exiting the program in December, according to a Bloomberg News survey of 41 economists, conducted on January 10th. The Federal Open Market Committee is scheduled to meet next on January 28-29.

Elsewhere, AUD/USD touched a daily high at 0.8804 at 2:00 GMT, after which consolidation followed at 0.8792, rising 0.14% for the day. Support was likely to be received at July 22nd 2010 low, 0.8738, while resistance was to be met at January 17th high, 0.8828.

TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

Related News

  • USD/ZAR: Rand pulls back from 3 1/2-month high ahead of cenbank meetingsUSD/ZAR: Rand pulls back from 3 1/2-month high ahead of cenbank meetings Key pointsUSD/ZAR rebounds from recent 3 1/2-month trough Fed, ECB rate decisions in focus ZAR traders await South Africa PPI dataThe South African Rand extended a pullback from last week's 3 1/2-month high […]
  • Lowe’s share price up as Q2 sales top estimatesLowe’s share price up as Q2 sales top estimates Lowes Companies Inc, the second-biggest US home improvement chain, reported on Wednesday better-than-expected same-store sales in the second quarter as it benefited from improving consumer sentiment and a continuously recovering US housing […]
  • Forex Market: GBP/NOK daily forecastForex Market: GBP/NOK daily forecast During yesterday’s trading session GBP/NOK traded within the range of 10.4269-10.5108 and closed at 10.4910.At 7:44 GMT today GBP/NOK was gaining 0.20% for the day to trade at 10.5135. The pair touched a daily high at 10.5165 at 7:45 […]
  • Silver extends losses on US-China trade deal hopesSilver extends losses on US-China trade deal hopes Spot Silver slid more than 1.5% on Monday, extending the loss from the prior week, as signs of easing US-China trade tensions seemed to have reduced the safe-haven allure of the precious metal.Top economic officials from US and China over […]
  • Jabil Inc announces acquisition of RetronixJabil Inc announces acquisition of Retronix Jabil Inc, a global leader in design, manufacturing and supply chain solutions, said on Monday that it had acquired Retronix, an innovative provider in the reclamation and refurbishment of electronic components.Retronix has been a […]
  • EUR/USD trades little changed after touching 5-week highs yesterdayEUR/USD trades little changed after touching 5-week highs yesterday Having hit a 5-week high on Thursday, today the euro traded little changed against the US dollar.EUR/USD traded at 1.3671 by 12:53 GMT, gaining 0.01% on a daily basis. Support was likely to be received at December 5th low, 1.3544, while […]