Pound Hits 8-Month High Against Dollar on Improved Economic Data

The British currency, which was failing to climb versus its main rivals, the euro and the dollar, posted significant gains in the beginning of this week as improved economic data emerged in the latest British reports.

The pound hit a eight-month high level against the greenback after a Nationwide Building Society report indicated a rise in house prices combined with another report showing improved consumer confidence data, making investors to purchase assets priced in sterling massively, damping demand not only for the U.S. dollar, but also other options like the euro and the yen. The British currency was having a hard time to climb to levels near those before the global slump started, as the real estate market suffered intensely due to the credit crunch, affecting mortgages availability and loan possibilities. Today, the Nationwide Building Society report climbed 0.9 percent, and this increase is highly considerate among traders as a sign of economic revival in Great Britain, pushing the pound sterling high versus virtually all major traded currencies.

British economists are very optimistic with the house price rises, saying it will create a solid bullish pattern for the national currency, and that it will follow for the next months, instigating traders to purchase the pound, which was relatively devalued versus the euro and the greenback.

GBP/USD traded at 1.6595 as of 11:11 GMT falling from a high price of 1.6715 hours before but still on the raise if compared to yesterday’s rate of 1.6490. EUR/GBP was very volatile in the previous 24 hour period, but the rate remains for the moment virtually the same at 0.8508.

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