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Higher UK Mortgage Approvals Doesn't Stop Sterling Reversal

Higher UK Mortgage Approvals Doesn't Stop Sterling Reversal

Benjamin Spier, Technical Strategist

THE TAKEAWAY: BBA mortgage approvals rises to 30,503 in August -> Housing loan approvals still considered subdued -> Sterling reverses earlier gains

UK mortgage approvals rose to an unexpected 4-month high in August according to BBA. The BBA loans for house purchases was reported at 30,533, beating expectations for a drop to 28,100 from July’s revised 28,750 home loans. The mortgage approvals were 13% lower than August 2011.

Although the home loan approvals were slightly higher, they are still considered overall subdued. BBA Statistics Director David Dooks said, “Household mortgage approvals are improving slightly, but unsecured borrowing continues to be subdued.”

The British Pound did not significantly react to the better than expected mortgage numbers, instead Sterling reversed gains made over the previous hour. The Pound rallied against the US Dollar earlier in today’s session, temporarily climbing above 1.6250. Resistance could be found by the 1.6309 yearly high.

GBPUSD 15-minute: September 25, 2012

Higher_UK_Mortgage_Approvals_Doesnt_Stop_Sterling_Reversal_body_gbpusd.png, Higher UK Mortgage Approvals Doesn't Stop Sterling Reversal

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.