As European trading got underway the Euro was heading for its third five-day decline against the Pound as the British asset was bolstered by some impressive UK news.
Although Sterling was little changed against the US Dollar it advanced on the Euro as a Nationwide report detailed a 1.4 per cent seasonally adjusted increase in UK house prices in December.
The EUR/GBP pairing posted further losses as separate figures confirmed that UK mortgage approvals jumped to an almost six-year high in November, rising to 70,800.
According to Rabobank International currency strategist Christian Lawrence; ‘Euro-Sterling is going to struggle to make a meaningful move higher and the path of least resistance will probably be lower for the pair. Help to buy [the government’s affordable home loan scheme] is providing a significant boost to the housing market and we think that’s set to continue. For now, it looks like we’re going to see continued house price growth going forward.’
Data published today also confirmed that the UK construction sector enjoyed a strong rate of expansion in December, with the PMI coming in at 62.1, slightly down from the 62.6 recorded in November but better than the 62.0 forecast.
Although yesterday’s manufacturing reports for the Eurozone and Germany were fairly upbeat, fears regarding the downturn in France and animosity in Latvia (the Eurozone’s newest member) are lessening the Euro’s appeal.
The common currency was also adversely affected as the appeal of higher-risk assets was lowered by China’s disappointing non-manufacturing PMI report.
Next week Eurozone data to watch out for includes German/Eurozone services PMI, Eurozone investor confidence, German inflation, German unemployment rate, German trade balance and Eurozone retail sales/unemployment rate.
Of course the Bank of England and European Central Bank rate decisions are also likely to have a considerable impact on the EUR/GBP pairing.
Euro (EUR) Exchange Rates
As of 10:30 GMT
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3636 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8294 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.5171 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6563 <
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4505 <