The Euro gained ground against the Pound after the UK currency came under pressure early in Thursday’s session as a report showed that house prices in the country fell unexpectedly in December.
In a report released by the Royal Institution of Chartered Surveyors, its UK house-price gauge fell to 56 from the previous month’s figure of 58 and was below economist expectations for a figure of 59. As a result of the data the Pound fell for the first time in three days against the single currency. Sterling also came under pressure from the release of Citigroup Inc’s economic surprise index for the UK which slide to a six-week low on Wednesday.
“Positive momentum in UK data seems to be slowing. We’ve seen it in the housing data overnight. We’re looking for a bigger move down in the Pound over the next few weeks,” said an economist at Morgan Stanly.
The Euro managed to rise sending the GBP/EUR pairing below the 1.20 level on the back of the Pound’s weakness.
The Euro’s rise came despite data showing that the annual rate of inflation across the Eurozone fell in December, dropping further away from the European Central Banks target. The report increased concerns over the regions ability to resolve its debt issues.
According to Eurostat, Consumer Prices rose by 0.3% in December. Compared to the previous year they increased by 0.8%, below calls for a rise to 0.9% and kept the inflation rate well below the ECB target of 2%. Investors shrugged off the inflation data however after being set at ease that action will be taken by the ECB if inflation continues to fall.
The single currency found support from a report which showed that new-car sales in Europe surged to their highest level in almost four years, adding to signs that the region’s economy is improving. A Positive bond sale in Spain also bolstered the single currency.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3616 ,
Euro,,British Pound,0.8340 ,
Euro,,Australian Dollar,1.5495 ,
Pound Sterling,,Euro,1.1987 ,
US Dollar,,Euro,0.7343 ,