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GBP: Sterling gains ground late in the day

By Smart Currency February 8th, 2017

Sterling (pound, GBP) ended yesterday slightly stronger. However, it had been a hectic day for sterling as it saw during the course of the day significant movement against the US dollar [two cents between the high and low of the day] and the euro [one and a half cents between the high and low of the day].

First thing, the pound weakened against the US dollar (USD) as house prices in the UK fell for the first time in five months, according to figures from the Halifax. The average price fell by 0.9 percent, sparking worries that the housing market may be cooling. This could point to a market slowdown in 2017; however, the Halifax went on to say that a shortage of houses for sale should prevent a steep slump in prices.

The strengthening of sterling later in the day seemed to be driven by negative US dollar sentiment as markets wait for clarity on President Trump’s fiscal policies although he is very clear that he wants a weaker US dollar so at to help boost US exports.

Looking to the day ahead, much of the focus will be on parliament as they debate and vote on the final reading of the bill to trigger Article 50 before it is passed to the House of Lords to approve.