House prices down, Pound may follow

Today is widely expected by many to be Golden Wednesday at the Olympics, with team GB expected to get their first gold medal of the Olympics in either cycling, rowing or hopefully both! Economically however today is already turning out to be a bad one for the Pound.

Things started early with Nationwide House Prices at 6am showing an unexpectedly high decline both year on year and month on month in UK house prices. The market reacted instantly and we have already lost 0.3% against the Euro. In the next couple of hours we have various PMI manufacturing figures from the UK and Europe, which could see things drop further if recent UK manufacturing trends continue.

This is all prior to tomorrow’s Bank of England and European Central Bank monthly policy statements. The ECB are unlikely to do anything further having already used an interest rate cut 2 months ago. The BoE on the other hand could consider doing the same as the ECB and cutting rates or even further Quantitative Easing – both of which would weaken the Pound almost certainly.

If you do have a imminent currency requirement then it is worth keeping in touch with your Currency Index account manager to make sure you are fully informed on the impact data releases are having, so you can make your decision at the right time!

Good luck to Bradley Wiggins and all the other GB athletes competing today, and good luck to Mervyn King and the rest of the MPC with their deliberations!