Macroeconomic data from Great Britain was positive today, but this did not help the pound. The currency was flat against some of its major counterparts, including the euro and the Japanese yen, and dropped versus the US dollar.
The number of mortgage approvals rose from 62,007 in May to 67,196 in June. It was higher than the median forecast of 63,000. The data suggests that the housing market continues to expand even though the Bank of England took steps recently to cool growth in order to prevent housing bubble.
The International Monetary Fund commented about UK monetary policy in a report yesterday:
Accommodative monetary policy is appropriate for now, given weak inflation pressures, but policy might need to be adjusted quickly if inflation takes off. Interest rate increases may also need to be considered if macroprudential tools are insufficient to deal with financial stability risks from the housing market.
The IMF also said that “sterling is moderately overvalued”.
GBP/USD dropped from 1.6981 to 1.6945 as of 23:02 GMT today. GBP/JPY was at 173.01, and EUR/GBP traded at 0.7913, both being virtually flat.
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