The British pound continues to rise, particularly against the US dollar, but is down relative to the euro, Australian dollar and Canadian dollar. The US dollar is broadly selling off this week after entering overbought conditions last week. Today's RICS housing survey suggested continuing strength in the UK housing market, with figures beating expectations (6 vs. 4 expected). As the pound continues to rebound from previous concerns regarding Theresa May's weak position within the Conservative Party, the short-term rally is more likely to continue. We covered our recent views on the pound in a thought piece recently.
GBP/USD is currently above 1.32, trading close to 1.3230. EUR/GBP is flat this morning (after rising yesterday) and is currently trading above 0.8960. The pound is down against both the Australian dollar and the Canadian dollar, with GBP/AUD around 1.690 and GBP/CAD around 1.6470.
After various survey data points last week, this week will include a fair amount of macroeconomic data for the UK. Retail sales came in quite strong (1.9%) vs. previous figures (1.3%). Tuesday's manufacturing (2.8% vs. 1.9% expected) and industrial production figures (1.6% vs. 0.8% expected) beat expectations. Trade balance data came in very weak (-14.2b vs. -11.2b expected). Today's house price data beat expectations (6 vs 4 expected). Last week's survey data suggested good services growth, while construction and manufacturing PMIs came in below expectations.