Talking Points:
- UK house prices rose quite sharply on the month in January, according to Rightmove
- Their 0.4% gain came after a 2.1% slip the month before
- However, the Brexit-mired BritishPound was in no mood to celebrate
News of steady house prices in the United Kingdom couldn’t do much to bolster a British Pound beset once again by Brexit worries on Monday.
The average cost of a home rose by 0.4% on the month in January, according to property website Rightmove. This was much better than December’s 2.1% fall and suggests that the market is reviving again after the usual holiday-season lull. Prices were up 3.2%compared with January 2016, which was a little less than December’s 3.4% on-year rise.
The British Pound did manage to twitch up against the US Dollar in the immediate aftermath of the figures, with GBP/USD getting up to 1.20473 from 1.20370 just before their release.
However, this is an extremely modest resurgence compared to the 1.5% gap lower for the UK currency against its major counterparts earlier on Monday. The unit has come under significant pressure as investors worry that UK Prime Minister Theresa May will outline plans for a “hard Brexit”– entailing loss of free UK access to the single market – when she makes what’s being billed as her most important speech on the subject on Tuesday.
The Sunday Times reported that May will give her personal backing to the UK leaving both the European single market and the customs union in order to regain the freedom to limit immigration and secure trade deals with other countries.
This issue will be the overwhelming focus for Sterling markets this week, which probably means that comparative data crumbs such as the Rightmove survey will continue to pass them by.
British Pound feels the heat:
Chart compiled using TradingView
It may be your favorite currency, but is it anyone else’s? Take a look at the DailyFX sentiment page.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
