- Pound (GBP) rises after losses last week
- House prices rose annually 0.1%
- Euro (EUR) falls after Bundesbank report
- Germany is likely in a recession
The Pound Euro (GBP/EUR) exchange rate is rising after losses last week. The pair fell -0.15% in the previous week, settling on Friday at €1.1689 and trading in a range between €1.1664 – €1.1769. At 11:00 UTC, GBP/EUR trades +0.15% at €1.1711.
The pound is edging higher in a relatively quiet start to the week as investors digest updated UK property news.
According to Rightmove, the price of homes being put up for sale in the UK has risen annually for the first time in six months as demand strengthens. The property website reported a 0.1% increase year on year in February for the asking price, which is the first annual increase since August. On a monthly basis, prices increased 0.9% compared to January, in line with the 10-year average of a monthly 1% rise in February.
The slowdown in the UK property market has improved in recent months, amid rising expectations that interest rates will fall, which has resulted in lower mortgages.
Meanwhile, the Royal Institute of Chartered Surveyors reported this month the largest jump in new buyer inquiries in almost two years.
Market data is not expected to provoke a change in the Bank of England’s position regarding policy; however, an improving housing market often goes hand in hand with rising consumer confidence.
There is no high impacting data today attention will turn to PMI data later in the week.
The euro is heading lower in subdued trade after the release of the Bundesbank monthly report.
The German central bank believes that the economy is likely in a recession now, as measured by two consecutive quarters of negative growth due to weak external demand and muted internal consumption. However, they added that the German economy isn’t facing a severe downturn.
Last week, the euro gained after ECB president Christine Lagarde warned against the central bank cutting interest rates too soon. The market is currently pricing around 110 basis points worth of cuts from the ECB this year, which is down considerably from around 150 basis points just over a week earlier.
