Tuesday, November 3, 2009

Pound Declines on the Lowest Home Sales

The Great Britain pound continued to fall today against the other major currencies after reaching the all-time low against the euro as the home sales report showed the lowest level in the last 30 years.

The Royal Institution of Chartered Surveyors released its October issue of the U.K. real estate market survey. It showed that the quarterly number of completed sales per surveyor (real-estate agent) fell to the record low — 10.9 homes. It’s the lowest level since the RICS began to conduct these surveys in 1978.

Pound is still trading in the strong downward trend against the current Forex favorites — the U.S. dollar and the Japanese yen. The trend against the euro is less distinctive, but the pound is losing to its younger counterpart in the long-term. The traders expect the new rate cuts from the Bank of England, which is more tolerant to the lower interest rates than the European Central Bank.

GBP/USD fell from 1.5626 to 1.5586 as of 8:47 GMT today. GBP/JPY declined from 153.11 to 152.21, while EUR/GBP rose from 0.8160 to 0.8177 today after reaching 0.8210 yesterday — the highest level since the euro’s inception.