Hopes for the UK economy are driving the UK pound higher, especially against the US dollar, today. Rising home prices are providing optimism that the UK economy is improving, and that is reflected in sterling gains today.
The latest home prices news is in, and it appears that asking prices for homes in the United Kingdom rose by 2.1 per cent in May. This brings the total increase for the year so far to 9.1 per cent. On top of that, the recently weak pound has boosted exports, and that’s helping the economy as well.
Indeed, this good news about the UK economy was followed up by Mervyn King commenting about a “modest recovery” in the United Kingdom during a broadcast. The Bank of England still needs to do more to promote growth, he pointed out, but things are moving in the right direction.
The good news is helping the UK pound against the US dollar, which is struggling ahead of Ben Bernanke‘s testimony before the US Congress later this week. Pound is also gaining slightly against the euro, which continues to struggle against some currencies due to continued turmoil in the eurozone.
At 15:38 GMT GBP/USD is up to 1.5224 from the open at 1.5192. EUR/GBP is down to 0.8450 from the open at 0.8054. GBP/JPY is lower, dropping to 156.0405 from the open at 156.1250.
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