The Sterling Unchanged against the Euro Despite House Prices Increase

Tradervox.com (Dublin) - The pound was little changed against the euro following last week’s drop as an industry report indicated that UK house prices increased for a ninth month in October. Britain’s currency was within two U.S. cents of a four-week high versus the dollar as the data added to evidence the economy is strengthening. Gross domestic product grew 0.8 percent in the third quarter, the most since 2010, the government said last week. British government bonds were little changed.

According o Lutz Karpowitz, a Frankfurt-based senior currency strategist at commerzbank AG, the UK data will continue to be good. He noted that the GDP data released last week was strong and this is leading to the strengthening of the pound.

The pound traded at 85.45 pence per euro at 4:26 p.m. London time, after depreciating to 85.55 pence on Oct. 24, the weakest level since Aug. 29. It slid 0.9 percent last week. Sterling dropped 0.2 percent to $1.6132 after rising to $1.6257 on Oct. 23, the highest since Oct. 1.

Average home values in England and Wales rose 0.5 percent this month, matching September’s increase, Hometrack said in a statement. They’ve climbed each month since stagnating in January. Annual price inflation accelerated to 3.1 percent, the most since November 2007, according to the London-based property researcher.

The pound gained 3.1 percent in the past three months, the best performer of 10 developed-nation currencies tracked by Correlation-Weighted Indexes, on optimism economic growth was quickening. The euro rose 1.9 percent, while the dollar weakened 2.3 percent.

Under its forward-guidance policy announced Aug. 7, the Bank of England pledged to keep the benchmark interest rate at 0.5 percent at least until unemployment falls to 7 percent, subject to caveats on inflation and financial stability. Officials are preparing new quarterly forecasts for growth and inflation, which Governor Mark Carney will present on Nov. 13.

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