The British pound broke higher today on the back of stronger UK economic data. House prices increased 0.7 percent in the month of September, bringing the annualized pace of growth up to 9 percent.
The July index of services also increased by 1.0 percent compared to the market?s 0.8 percent forecast. There were disappointments as well, but that was offset by evidence of stability in the UK housing market. The CBI distributive trades survey dropped to 12 from 15, which was in line with expectations while the BBA loans for the month of August fell from 66.9k to 61k. Gfk consumer confidence is due for release tomorrow. We expect confidence to deteriorate given the recent Northern Rock debacle.
Written by Kathy Lien, Chief Currency Strategist of DailyFX.com