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Could UK mortgage approvals offer pound rebound?

business-articlesCould UK mortgage approvals offer pound rebound?
  • Higher UK mortgage approvals to offset political anxiety
  • Euro weakens ahead of Eurozone business confidence index
  • Worries over US economic outlook weigh on US dollar
 
 Pound looks for boost on mortgage approvals rebound
 
As the fallout from the European Parliament elections and Theresa May’s resignation continues the pound could struggle to find much in the way of traction today.
 
However, an uptick in UK mortgage approvals may encourage GBP exchange rates to recover some of their lost ground this morning.
 
Signs that lenders and prospective buyers are taking a more optimistic outlook could encourage a greater degree of confidence in the domestic outlook, in spite of ongoing political anxiety.
 
Another month of weakening in lending, though, would expose the pound to a fresh source of downside pressure.
 
 
Weakening business confidence to add to euro bearishness
 
With the European Central Bank (ECB) looking set to maintain a dovish policy bias for the foreseeable future the appeal of the euro has generally diminished.
 
Further weakness could be in store this morning on the back of the Eurozone business confidence index for May.
 
As forecasts point towards the index continuing to move lower investors are likely to see fresh incentive to sell out of the single currency.
 
Lower levels of business confidence would suggest that the Eurozone is in store for a weaker showing in the second quarter, something which would add to the case for ECB dovishness.
 
 
US dollar vulnerable ahead of consumer confidence index
 
April’s US durable goods orders data fell short of forecast ahead of the weekend, showing a contraction of -2.1% on the month and exacerbating worries over the health of the US economy.
 
USD exchange rates could extend their losses this afternoon if the latest US consumer confidence index also shows signs of weakness.
 
With the US-China trade dispute looking set to continue for some months yet to come consumers are likely to come under increasing pressure, limiting the prospect of a stronger second quarter.
 
If the index shows an uptick on the month, however, this could offer the US dollar a rallying point against its rivals.
 
 
Upcoming Data:
 
Tuesday, 28th May 2019
09:30 GBP BBA Loans for House Purchase
10:00 EUR Eurozone Economic Confidence
15:00 USD Consumer Confidence Index
 
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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