British Pound Declines Against US Dollar on Strong Housing Data

The British pound today declined against the US dollar after the release of positive US housing starts and building permits data. The GBP/USD currency pair reversed all its earlier gains made during the early European session after an initial decline triggered by uncertainties regarding the ongoing Brexit negotiations.

The GBP/USD currency pair declined by over 90 points from its two-week high of 1.3260 to hit a daily low of 1.3169 during the early North American session.

The currency pair had rallied higher during the late Asian session, but began trending downwards in the early European session following comments from the UK’s Brexit minister David Davis. He stated that Germany and France were blocking the progress on critical trade talks. Davis’ comments increased the selling pressure on the British pound as investors sold the risk-prone Sterling pound and bought the greenback.

The release of the US housing data by the Census Bureau in the early North American session served to drive the currency pair to new lows. The housing starts data for October came in at 1.29 million units as compared to the expected 1.19 million units and the previous 1.135 million units. The housing starts recorded a 13.7% increase, which was higher than the expected 5.6% increase. The building permits data for October recorded a 5.9% increase to come in at 1.297 million permits as opposed to the market consensus of a 2.0% increase.

The currency pair’s future performance is likely to be affected by political events in the UK and USA over the weekend.

The GBP/USD currency pair was trading at 1.3197 as at 15:14 GMT having recovered slightly from its daily low of 1.3169. The GBP/JPY currency pair was trading at 148.38 having dropped from a daily high of 149.32 earlier today.

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