GBPUSD is falling despite relatively strong housing data
GBPUSD Outlook – 29th June 2021
GBPUSD fell in the morning trading on Tuesday in the European market, the pair lost more than 0.30%, to trade at the level of $1.3835, which is about 1.13% less than the highest point last week. This decline comes despite the strong economic numbers Relatively to the United Kingdom.
GBPeclines after the UK house prices data
The UK housing sector is growing robustly, as demand continues to outpace supply, evidenced by robust house price index (HPI) data, which showed the index rising 13.4% year-on-year, this was relatively smaller than the average estimate At 13.7%, it was also higher than the previous month’s increase of 10.9%.
This increase is mostly due to the historically low interest rates in the UK, the Bank of England kept interest rates at a record low of 0.10% to protect the economy from the pandemic, moreover, the £875 billion quantitative easing package helped lower interest rates.
Moreover, UK house prices rose due to the stamp duty holiday passed by the government last year, most importantly, the lockdown helped more people save to pay their down payment.
The GBPUSD pair also reacted to the relatively strong borrowing data, according to the Bank of England, which increased mortgage lending from more than 3.03 billion pounds to more than 6.85 billion, and in the same period, the number of mortgage approvals increased from more than 86.90 thousand in April to 87.55 thousand, net lending to individuals increased from more than 2.9 billion pounds to more than 6.9 billion pounds.
Thus, the GBPUSD pair is on its way to its worst monthly performance since September due to the high number of coronavirus cases in the country, and the government has postponed the reopening of its economy until July.
The US dollar continues to rise ahead of important data
The US dollar index continues to rise against most global currencies, to record the second consecutive daily gain, after it rose by 0.2% to reach its highest level in a week at 92.07 points.
Economic growth is accelerating in the US, aided by stimulus policies by the Federal Reserve and strong government spending, progress is set to accelerate, as the Biden administration is expected to get its own infrastructure deal, the Senate is on the verge of passing a trillion-dollar infrastructure package Which will see the government build roads, bridges and other transportation projects.
Earlier this month, data revealed that the core Consumer Price Index (CPI) rose 4% in May while the Producer Price Index (PPI) rose more than 6%.
The dollar index will react to the latest US consumer confidence data due later in the day, analysts expect the data to show confidence rose in June as the economy continues to open, and the data will follow the ADP estimate for private-sector jobs due out tomorrow Wednesday.
Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.