THE TAKEAWAY: Better than expected UK housing data props Sterling against the Euro, with less than ideal numbers from the continent slowing down the single currency
Mortgage approvals in the United Kingdom rose during March, sparking a bout of strength in the Pound against the Euro and US Dollar. 49,900 mortgages were approved versus the 48,000 approvals forecasted by a team of economists.
Sterling strengthened against the beleaguered Euro as the positive UK data contrasted with less than ideal numbers from the continent. EUR/GBP fell to fresh yearly lows intraday.
Although the data encouraged some market participants, especially since in coincided with a better than expected PMI manufacturing out of the UK, the outlook for policymakers remains bleak.A GDP contraction in 2012’s first quarter has pushed the UK into its first double-dip recession since the 1970s, and pressure on UK officials is expected to increase. UK PM David Cameron has faced criticism for promoting austerity instead of stimulus, andthe Bank of England recently said growth could contract because of weak construction during the Jubilee holiday season.