The British pound rose to a 26 year high on the back of broad dollar weakness and speculation that the housing market may not be in as much as trouble as everyone may have initially thought. According to Nationwide, tight supply drove house prices up 1.1 percent in October, the biggest rise in four months.
Consumer confidence however has fallen to the lowest level since March, which signals potential troubles ahead for retail sales, but for British pound traders this has mattered little since demand for high yielding currencies and dollar strength or weakness seems to be the primary driver of the currency’s movements at the moment. Manufacturing PMI is due for release tomorrow. The recent strength of the British pound is expected to dampen manufacturing activity.