UK house prices fall

The Nationwide house price survey out this morning confirmed that UK house prices fell by 1% in 2012, and expect a similar drop in 2013.

Although house prices don’t tend to directly affect exchange rates, they are a good indicator of economic prosperity in general, and falling house prices can often lead to a weakening currency. The Pound fell slightly this morning when the news was announced.

In better news for the Pound, retailers John Lewis and Next both announced better than expected results for the Christmas period.

Overseas, tonight we have the release of the Federal Reserve minutes in the USA. These will show details on discussions of US monetary policy, including further economic stimulus, and are likely to have an effect on the US Dollar, which has remained weak (cheap) despite the apparent resolution of the ‘fiscal cliff’ problem. Tomorrow we then have the main monthly American employment figures, so the next 48 hours could see volatility in the dollar – let your account manager at Currency Index know if you would like to be alerted to any movement in your favour.