House sales supported British pound
The major currencies have strengthened versus the U.S. Dollar Monday by the end of the day, extending gains on Tuesday at the beginning of the European Session, but the growth has limited feature.
Sterling, which sharply slid from the level at 1.58 against the dollar and was strengthening all day long versus the single currency, posed signs for recover on Monday. Market revised its views to possible resignation of British Prime Minister Brown and considered that the Minister President would stay on his post. Besides activity in the UK market continues growing, so interest from new buyers marked growth 7 month in a row. Net balance of observers, expecting rather growth than decline of buyer interest in May, hit the highest level since August 1999.
Also definite sings appeared that growing buyer interest starts influencing on number of deals. However UK retail sales in May turned into falling after growth in April. Comparable sales in May declined by 0.8% on year-over-year basis, general sales rose by 0.8%. Euro zone report yesterday showed that number of orders in manufacturing industry sector in Germany in April remained stable after March growth. Market players considered it the next sign of diminishing economic recession. Although German trade balance data exceeded forecasts, it showed next decline of export volume on falling external demand. Economic situation in the Eastern Europe puts pressure on the common currency, especially from Latvia whose credit rating was revised to negative.
