The US dollar gained close to half a per cent against the pound on Wednesday, underpinned by strong manufacturing and services activity data. This morning, the US dollar matched yesterday’s gains, taking sterling to a three-week low.
The pound also made marginal losses against the euro following Germany’s stronger-than-expected business sentiment. The pound-to-euro rate is currently trading 0.3% lower than this time last week.
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Sales of new single-family homes in the US jumped by 12.3% in September to a rate of 759,000, up from a revised 676,000 in August. This surpassed the market consensus of 680,000 and is believed to be driven by an increased demand for new housing and homebuilding. The median house price of new homes sold was €503,900, down from €530,100 a year ago.
Policymakers at the Bank of Canada chose to keep the interest rate unchanged at 5.0% in its October meeting, matching forecasts and following inflation which fell to 3.8% in September.
The Ifo business climate indicator for Germany rose 1.1 points to 86.9 in October from 83.1 in September. This marks the first increase in six months and exceeded the market consensus of 85.9. Industry sentiment vastly improved among manufacturers, service providers and constructors.
New figures from Lloyds Banking Group show that UK house prices will not stop falling until 2025. The lender forecasts that prices will fall by 5% by the end of 2023 and are likely to decrease by another 2.4% in 2024.
This afternoon, the spotlight is on the European Central Bank which is due to reveal its latest interest rate decision at 1:15 pm (UK time). Markets forecast the bank rate will remain unchanged at 4.5% after ten consecutive hikes.
Shortly after, US durable goods and US GDP figures will be released for September and quarter three of 2023. More on the US economy below.
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