Forex - GBP/USD edges higher but weak U.K. housing data weighs

Published 12/01/2010, 03:02 AM
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Investing.com – The pound edged higher against the U.S. dollar on Wednesday, but remained close to an 11-week low after data showed that U.K. house prices declined to a nine-month low in November.

GBP/USD hit 1.5594 during late Asian trade, the daily high; the pair subsequently consolidated at 1.5581, gaining 0.11%.

Cable was likely to find support at 1.5448, the low of September 15 and resistance at 1.5771, the high of November 26.

In a report, Nationwide Building Society, Britain’s biggest customer-owned lender, said its November house price index fell to the lowest level since February, declining 0.3%, after falling 0.7% in October.

Analysts had expected the house price index to decline by 0.4% in November.

Home prices in the U.K. rose at an annualized rate of 0.4% in November, after rising by 1.4% in October.

Nationwide's chief economist Martin Gahbauer said, “Much of the weakness in property values since the Spring has been driven by a return of sellers to the market, following unusually low levels of property for sale in 2009 and early 2010.”

Meanwhile, the pound was down against the euro, with EUR/GBP gaining 0.40% to hit 0.8375.

On Tuesday, U.K. Chancellor of the Exchequer George Osborne said Britain’s GBP3.25 billion bilateral loan to Ireland was not a “blank check” for other European countries. He also denied that a banking crisis in Ireland would have led to a secondary crisis in Britain. “There’s no indication that I’ve received that that’s the case,” he said.

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