All of the high yielding currencies rallied today with the exception of the British pound as the sterling was weighed down by the RICS house price index which fell to a 2 year low in August.
This report indicates that interest in home sales have waned significantly, which may be a major sign that the UK housing market is ready for a turn. Furthermore, the third quarter home sales balance rose to the highest level since the series began in 1989. With the minutes from the latest Bank of England meeting due for release next week, British pound traders will be exceptionally sensitive to any data that provides more information on whether the central bank will continue to raise interest rates. In the meantime, there is no economic data scheduled for release tomorrow indicating that the GBP/USD’s movements will be determined exclusively by the market’s demand for dollars and high yielding currencies.
Written by Kathy Lien, Chief Currency Strategist for DailyFX.com