GBP/USD Uninspired as RICS House Price Balance Beat Expectations

Talking Points:

• British Pound little-changed following upbeat UK housing data
• RICS house price balance 30% in November vs the 26% forecast
• UK CPI and FOMC rate decision remain focus for near-term risk

After some initial excitement, the British Pound failed to sustain gains against the US Dollar as strong housing data appeared to be overshadowed by upcoming event risk. The Royal Institute of Chartered Surveyors (RICS) released November’s UK house prices survey, showing the share of respondents reporting gains rose to 30 percent versus 26 percent expected and 23 percent in October.

Traders have worried that uncertainty following the Brexit vote may cool economic activity. A better-than-expected RICS house price balance may suggest the domestic housing market is proving to be resilient, at least so far. This could imply a rosier view for the wider economy.

A half-hearted response from the British Pound after the data crossed the wires may reflect unwillingness to take directional bets ahead of upcoming event risk. UK CPI, a number watched closely by the BOE, as well as the FOMC rate decision are on tap next week.