The British Pound had a pretty mixed morning on Thursday but as the euro came under heavy selling pressure in the afternoon, GBP/EUR broke out of its 2018 range from roughly 1.1200-1.1475 and moved on to a 1.15 ‘big figure’ for the first time since June last year. This pushed the GBP higher across the board, despite some generally soft UK economic data. Gains ranged between three and eight-tenths of a point and with GBP/USD almost hitting its 2018 high of 1.4270, the Pound ended the day clearly at the top of the FX leaderboard. Overnight in Asia, however, it is struggling to hold on to these gains and though trading ranges have been quite narrow, it begins the day slightly weaker against all the major currencies we follow closely here.
In economic news, the UK’s property surveyors issued the most downbeat assessment of the housing market for five years. The well-respected Royal Institution of Chartered Surveyors survey said that in March demand from buyers fell for the 12th month in a row, new instructions from sellers declined for the seventh consecutive month, and prices were flat nationally. RICS measures confidence in the property market by balancing surveyors seeing price rises against those seeing price falls. It said the figures were the lowest since 2013 with declines in London and the southeast being offset by gains in the East Midlands, Northern Ireland and Wales. The RICS Chief Economist said, “The findings provide little encouragement that the drop in housing-market activity is likely to be reversed anytime soon… Apart from the implications this has for the market itself, it also has the potential to impact the wider economy contributing to a softer trend in household spending.”
The British Chambers of Commerce published what it claims to be the UK’s largest and most authoritative private-sector business survey. Based on the responses of over 7,100 businesses, the survey shows that UK economic growth remained subdued in the first quarter of 2018, despite a strong export performance. It reported that fewer firms in the manufacturing sector saw an increase in domestic orders, and the balance of firms reporting an increase in domestic sales is now at its lowest level since Q4 2016. ““What growth we see in the UK economy is due principally to strong global trading conditions, rather than domestic demand, which remains muted. Uncertainty, recruitment difficulties and price pressures remain persistent concerns for businesses of every shape and size, even if short-term confidence levels remain resilient. Even with a standout performance from manufacturing exporters able to reap the benefits of lower Sterling, the UK economy as a whole is treading water, rather than powering ahead.” The Pound opens in Europe this morning with GBP/USD in the low-1.42’s with GBP/EUR in the low-1.15’s.