Data published this morning on UK housing prices and Euro-Zone inflation in August send the Pound higher against the Euro and the US Dollar.
Growth in UK housing prices accelerates
Nationwide housing prices grew by 5.6% compared to the same month last year. The figure shows an acceleration of increases in UK housing prices of 0.4% compared to July. This measure beat estimates by 1.1%, as many analysts expected growth in housing prices to decelerate post Brexit.
The month on month figure also increased from 0.5% in July to 0.6% in August, 0.9% higher than the estimated reduction in housing prices of 0.3%.
The UK data release this morning has indicated a healthier than expected climate for the UK housing market, which strengthened the Pound.
Euro-Zone inflation misses estimates
Bad news came in for the Euro, as data, also released this morning, indicated lower than expected Euro-Zone inflation, remaining well below target, in August.
The Euro-Zone Consumer Price Index, published by Eurostat, came in at 0.2%. The figure matches July’s measure and misses estimates by 0.1%.
The Consumer Price Index for a basket of core goods fell in August to 0.8%, down 0.1% from July.
On the news the GBP rose against the Euro and the Dollar.
The GBP/USD appreciated by nearly half a percent between 6.30am and 8.50am, to peak at 1.31508, its highest since late last Friday. It has since again depreciated slightly.
At 11.17am the GPB/USD stood at 1.31315.
The GBP/EUR also increased by nearly half a percent between 7am and 8.50am. The rate peaked at a new three weeks high of 1.17988, and has since again fallen slightly.
At 11.24am the GBP/EUR stood at 1.17809.
Tomorrow there may be more movements in the ForEx as well as the stock markets, as both European as well as North American countries publish their Manufacturing PMI for August.
However, most importance will this week be placed on the US Nonfarm payrolls for August, which will be published at 12.30pm on Friday and are likely to lead to some shifts in the market.
Current estimates predict that new jobs creation in all non-farming sectors in the US in August will have decreased from 255K the previous month to 180K. A higher reading may advance a bullish effect on the USD and could also further increase the likelihood of a FED rate hike in the near future.
Katharina Fleiner 31/08/2016
