Pound Slides as House Prices Fall 2.5%
The Great Britain pound fell sharply today against dollar, euro and yen as the house prices fell in March by 2.5%, indicating that the country’s mortgage market slump is not over yet.
Halifax House Price Index — a housing report of HBOSplc — showed a 2.5% decline in prices for March with the annual growth (March 2008 to March 2007) at as little as 1.1%, significantly below the overall CPI level in the United Kingdom (2.5%).
HBOSplc expects that there will "modest (low single digit) decline" in the U.K. house prices annually for 2008.
Markets reacted with a very strong movements on this report, as the traders became more insured that the Bank of England will cut interest rate to 5.00% on the 10th of April.
Pound was losing against other currencies today during the Asian trading session, before this housing report came out, but it started an even faster decline after its release.
GBP/USD fell from 1.9883 to 1.9778 (as of 8:07 GMT) today, GBP/JPY dropped from 203.67 to 201.44 and EUR/GBP almost reached its new absolute maximum going up from 0.7898 to 0.7970.
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