Forex Pros – The pound erased early losses against the U.S. dollar on Monday, edging higher after a report showing that U.K. house prices rose to an almost three-year high in May.
GBP/USD clawed back up from 1.6164, the daily low to hit 1.6207 during European morning trade, easing up 0.06%.
Cable was likely to find short-term support at 1.6145, Friday’s low and a six-week low and resistance at 1.6308, last Friday’s high.
U.K. property website Rightmove said asking prices rose 1.3% in May from April, reaching an average price of GBP238,874. The average price is now only 1.5% below the May 2008 peak of GBP242,500.
Rightmove said the increase in asking prices came despite the number of unsold properties hitting the highest level for the month of May on record.
Miles Shipside, director of Rightmove, said the Bank of England’s decision to hold interest rates at the unprecedented low level of 0.5% has disrupted the traditional economic formula of an excess of supply over demand leading to lower prices.
Meanwhile, the pound was slightly lower against the euro, with EUR/GBP rising 0.12% to hit 0.8725.
Later Monday, the U.S. was to publish official data on manufacturing activity in New York state, while Federal Reserve Chairman Ben Bernanke was to speak.
ForexPros.com
