Britain’s Halifax HPI, a wide measure of house prices, disappointed with a significant drop of 1.2% in August. A rise of 0.5% was expected, after last month’s 0.2% rise (revised downwards from +0.3%).
GBP/USD that already managed to recover and rise above 1.60, is now retreating.
This house price index is one of the widest and most accurate one out there. The data is based on the internal mortgage figures available to HBOS, which is one of Britain’s largest banks.
It’s important to note that some of the recent months were quite volatile. In June, a rise of 1.5%, and April saw a decline of 1.4%.
GBP/USD had a bad start to the week, starting off with a gap lower. After the 1.6110 line was lost, it dropped further, lost the round number of 1.60 and found support only above 1.5910.
One of the reasons for the fall was that Britain’s services sector’s growth weakened more than expected. All in all, the economy is quite sluggish in the UK.
Prior to the release, it managed to rise and cross the 1.60 line. This figure, reflecting the weakness of the housing sector, sends is back down.
Minor support is found at 1.5940, followed by 1.5910 and 1.5820. Resistance is at 1.60, with 1.6110 being more important.
For more on on the pound, see the GBP/USD.
Later today, British Manufacturing Production will also shake the pair. A small rise of 0.1% is expected, following last month’s drop of 0.4%.
