British Pound Climbs as House Prices Rebound

The pound sterling rallied against the dollar and the yen after a report on house prices revealed an unexpected rise in May, boosting confidence among investors that the real estate crisis may be easing.

The excellent news for the United Kingdom currency revived hopes for this European nation, one of the most hit by the global crisis and the credit crunch. A report on consumer confidence this month showed the highest level in almost a year, reversing a trend of extremely low marks, adding to that, the house prices, which had constant and severe losses since the second semester of the past year, jumped sharply in May, against most of the expert forecasts, adding an extra stimulus for the improved attractiveness of the pound.

According to analysts, the pound has been favored this week by a combination of two distinct factors: the positive house survey and the gradual recovery in markets boosted by evidences that the global slump is easing considerably. Specialists also indicate that multiple domestic and international news brought the pound down to levels which do not reflect the real value of the currency, and as the scenario is not so gloomy for the moment, the pound is coming back to a more reasonable pricing level.

GBP/USD traded at 1.6120 from 1.5915 and GBP/JPY also rose from 154.20 to 154.73.

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British Pound Climbs Against Euro as Confidence Emerges

The Great Britain Pound hit a six-month high against the Eurozone currency as domestic consumer confidence rose to a two-year high, indicating that recession might soon be over.

The British currency reached the $1.66 mark and the highest level against the euro since last December, after an index of U.K. service industries posted the first expansion in a period of more than twelve months. The Australian government reported that the economy unexpectedly grew in the first quarter, improving traders’ confidence globally that other countries may follow Australia’s economy, posting positive numbers for the next quarters. The pound sterling suffered massively the consequences of the credit crunch, reaching the point of being traded one to one against the euro, but since domestic and international data indicated that the global slump is easing, the pound entered a strong recovery trend.

Two main reasons would be behind the pound’s rebound, according to specialists. The rise of confidence in world markets is obviously helping the pound to reach higher levels, but the fact that the greenback is under pressure could be the main reason behind the British currency uptrend. Even if the national data in Britain is still not very optimistic, the actual drive in international markets is favoring the pound for the moment.

EUR/GBP fell to 0.8594 from 0.8634. GBP/JPY remained stable while GBP/USD rose to 1.6552 from 1.6400.

If you want to comment on the Great Britain Pound’s recent action or have any questions regarding this currency, please, feel free to reply below.