Exchange rates for sending money abroad are up across the board this week – mostly due to Nationwide’s house price survey showing a surprise 1.3% rise in house prices for July.
The UK’s biggest building society believes that we may even see house prices finish the year higher than they started – which would have been unthinkable just a few months ago.
This, as well as a rise in mortgage approvals announced earlier in the week by the Bank of England, has given the Pound a welcome boost, as good economic news (along with the increased likelihood of higher interest rates in due course) tends to make the currency more attractive to investors.
As a result the Pound is now trading at above 1.65 against the US Dollar, and for Euro exchange rates, the mid-market rate is back above 1.17 for the first time in weeks.
Chris Hall, analyst at brokers Currency Index, said “along with the house market data, the FTSE finishing at a 7-month high on Thursday, and higher oil prices, there is some renewed optimism in UK PLC – however recent rallies have shown these spikes can be short-lived.”
The next move for the pound is likely to be defined by data releases in the coming weeks – next Wednesday and Thursday see a raft of data out in the EU, UK, and USA. In particular, keep an eye on house price and inflation figures, which are key indicators as to whether the recovery is gaining pace or not, and can therefore have a strong influence on each currency and its spot contract exchange rates.
