UK Pound Pulls Back After Friday’s Performance

Last Friday, the UK pound put on quite the show, reaching a level not seen in four years against the US dollar. Today, the pound is pulling back against its major counterparts as Forex traders consolidate and take profits.

Friday’s performance was helped along by the jump in manufacturing output. Markit Economics reports that PMI increased to 57.3 in April, up from 55.8 in March. That indicates continued expansion, and indicates that the UK economy is well on its way toward recovery. On top of that, there have been promising signs recently in the housing market.
The housing market is an important measure of economic health in the United Kingdom, and the latest data for housing prices, shows an increase of 1.2 per cent from March to April. This brings the year over year gain to 10.9 per cent in April, and represents the best annual gain since 2007. While some might be worried that the housing market might overheat, BOE policymaker Spencer Dale has been quick to reassure investors.
Today, the pullback is likely due to a bit of caution, combined with a desire to take profits.
At 14:35 GMT GBP/USD is down to 1.6864 from the open at 1.6883. EUR/GBP is up to 0.8228 from the open at 0.8224. GBP/JPY is down to 172.1230 from the open at 172.4650.

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