Thursday during early deals, the British pound climbed to a new multi-week high against the European currency after a report showed that UK's nationwide house price unexpectedly rose for the first time in 17 months. The pound also climbed to a 16-day high against the Swiss franc, an 8-day high versus the Japanese yen and a 1-week high against the US dollar.
A monthly report from the Nationwide Building Society showed today that UK house prices increased unexpectedly in March for the first time since October 2007. House purchase activity reached highest level since May 2008, the mortgage lender said.
House prices increased 0.9% on a monthly basis in March, reversing a 1.9% fall in February. Economists were looking for another 1.5% decrease for March. Annual decline in house prices was 15.7% in March compared to 17.6% drop in February.
Against the US dollar, the British pound traded higher during early deals on Thursday. At 2:20 am ET, the pound-dollar pair reached a 1-week high of 1.4599, compared to 1.4471 hit late New York Wednesday. If the pair gains further, 1.474 is seen as the next target level.
The British pound that closed Wednesday's North American session at 0.9159 against the European currency edged higher to 0.9115 at 2:10 am ET Thursday. This set the highest mark for the pound since March 09. On the upside, 0.892 is seen as the next target level for the British currency.
Today, the governing council of the European Central Bank is expected to cut its overnight rate by 50 bps to 1 percent, a new historical low. The decision to cut rates is widely expected and all eyes will be on the ECB press conference hosted by Jean-Claude Trichet in Frankfurt.
Against the Swiss franc, the British currency edged down during Thursday's early deals. At 2:10 am ET, the pound-franc pair rose to a 16-day high of 1.6675 with 1.695 seen as the next target level. The pound-franc pair closed Wednesday's New York deals at 1.6578.
UK's sterling advanced to an 8-day high of 144.15 against the Japanese yen at 2:20 am ET Thursday. The next upside target level for the pair is seen around 147. The pound-yen pair closed Wednesday's deals at 142.59.
The yen fell as stock markets in Asia gained today, encouraging investors to increase purchase of higher-yielding assets.
On the economic front, the Bank of Japan said today that the monetary base in Japan was up 6.9% on year in March, standing at 94.46 trillion yen. That's up from 93.65 trillion yen in February, which saw a 6.4% annual increase.
Market participants also keenly await the outcome of the G-20 meeting and the market will be closely watching to see what measures they will discuss to fight the global economic crisis.
Across the Atlantic, the Labor Department is due to release its customary jobless claims report for the week ended March 27th at 8:30 am ET.
The Commerce Department is due to release its report on factory goods orders for February at 10 am ET. Orders for manufactured goods are likely to have decreased 0.3% in the month.
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