Pound Money Transfer News: GBP Sterling Recovery Falters

The pound’s strong recovery against all 16 of the most actively trade currencies faltered yesterday. After the better than expected UK employment data and the well received budget, there was some decidedly mixed data out yesterday.

The Council of Mortgage Lenders (CML) reported that total gross mortgage lending fell by 6% in February from January’s figure but is still 43% up on a year ago.

CML Chief Economist Bob Pannell highlighted how the more recent mortgage guarantee scheme is now starting to push “typical” loan-to-value levels higher.

Commenting on the latest data, Pannell said “The housing market got a further boost from this week’s Budget. This, together with benign developments in the economy more widely, should bolster short-term sentiment and activity. While the Bank of England currently does not currently see excessive house price rises outside London [...] we believe the bank will take further action later this year to try and dampen the housing market. This could very well include the Bank of England recommending to the government that it dilutes the Help to Buy mortgage guarantee scheme"

Meanwhile, the Confederation of British Industry’s total orders index for the three months to March rose to a balance of six points, up from three in the month before and well above the historical average of -17.

Anna Leach, CBI Head of Economic Analysis commented on how orders for sales overseas have underperformed over the last few surveys but added that several measures contained in the latest budget should help UK business’s to break into new, faster growing markets, thus aiding efforts to rebalance the economy.

The European Union (EU) has confirmed that it has agreed on a ‘banking union’ between member states thus putting an end to the stand-off between the European Parliament and EU member states. The agreement still needs European Parliament and EU finance minister approval but analysts feel that this is more a matter of bureaucracy and the draft agreement should soon be rubberstamped.

In the US, credit ratings agency Fitch Ratings decided to maintain the US' top-notch rating with a stable outlook after placing the rating of the world's largest economy on “Rating Watch Negative” back in October 2013.

Fitch pointed to the suspension of the federal debt limit “in a timely manner and in a way that avoided casting uncertainty over the full faith of credit of the US” and that gross general government debt will peak at 100% of GDP this year before “declining slightly for four years” as the main reasons behind its decision.

Meanwhile, the National Association of Realtors (NAR) reported that existing home sales dropped by 0.4% month-on-month in February to an annualised rate of 4.6 million units, slightly down from the 4.62 million figure reported in January.

NAR’s Chief Economist Lawrence Yun indicated that the market was more or less unchanged from the month before and referenced the same factors as having had an effect on levels of activity, namely unusual weather disruptions, restrictive mortgage lending standards and less favourable housing affordability.

The data also showed that the median price for existing homes was 9.1% above the same month of 2013 at $189,000. Housing inventory increased by 6.4% to 2 million homes, the equivalent of 5.2 months of supply at the current rate of sales and up from 4.9 months in January.