British Pound Sterling Live: GBP Rally Forecasted to Run out of Steam; RICS Confirm UK Housing Market Racing Ahead

The British Pound Sterling (Currency:GBP) has seen a halt to recent gains with market players no doubt awaiting tomorrow's important employment data. We hear from RBS that the British Pound is likely to turn lower against the US Dollar towards year end, however near-term momentum still favours GBP.

Forex rates as of last update:

• The Pound to Euro exchange rate is 0.08 pct higher on a daily basis at 1.1852.
• The Pound to US Dollar exchange rate is 0.01 pct lower at 1.5659.
• The Pound to Australian Dollar exchange rate is 0.74 pct lower at 1.6894.
• The Pound to New Zealand Dollar exchange rate is 0.5 pct lower at 1.9608.
• The Pound to South African Rand rate is 0.52 pct higher at 15.7370.

Please Note: These are wholesale quotes; your bank will levy a discretionary spread when passing their retail rate. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering you more currency. Please learn more here, or use our custom wholesale vs retail currency converter.

16:45: Caution ahead of Thursday's Carney testimony

Tomorrow's employment numbers will likely see Sterling volatility increase. However, expect further caution ahead of Thursday’s Inflation Report Hearings, when BoE Governor Carney will be speaking.             

Previous Carney appearances (Inflation report in particular) have proved to be real game changers for the UK currency.

15:40: Wednesday's big number

What are currency markets looking out for when tomorrow's employment data is released at 09:30?

A number of -22K.

That is, the claimant count is forecasted to fall by 22K in August; lower than the previous month's fall by 29.2k.

A significantly better figure will drive a flurry of Pound Sterling buying.

Also look at the ILO Unemployment rate which is forecasted to read at an unchanged 7.8 pct.

15:02: Welcoming the plastic pound

Are you ready for your pound to be both waterproof and last at least 2.5 times longer than it currently does?

No silly - we aren't saying soon your pound will buy you 2.5 times more than it currently does; rather it will weather the sands of time in a more durable fashion.

The central bank has begun a two-month public consultation to scrap paper and introduce polymer notes. The Bank says the polymer note is harder to counterfeit, more durable, more environmentally friendly, and cheaper.

Deputy Governor of the Bank of England, Charles Bean, said:

“Polymer banknotes are cleaner, more secure and more durable than paper notes. They are also cheaper and more environmentally friendly.   However, the Bank of England would print notes on polymer only if we were persuaded that the public would continue to have confidence in, and be comfortable with, our notes.

"The results of the consultation programme on which we are embarking will therefore form a vital part of our assessment of the merits of polymer banknotes."

More on this here.

14:36: Pound/US Dollar smack-bang on resistance level

Luc Luyet at MIG Bank points out that we are currently at a key level on GBP/USD:

"GBP/USD is now close to its key resistance area defined by 1.5718 (21/08/2013 high) and 1.5752, suggesting a limited short-term upside potential. A support lies at 1.5565 (see also the rising channel). A key support stands at 1.5423.

"In the longer term, prices are moving within a mild declining trend since April 2011. The strong resistance at 1.5752, coupled with short-term overbought conditions, could ignite the start of a new phase of weakness."

13:21: Pound to Euro exchange rate rally to prompt bumper property sales?

The summer rally in GBP/EUR could see an increase in the number of Brits making second-home purchases on the continent.

Richard Way, Editor at The Overseas Guides Company said:

"Now that the pound/euro rate is edging towards €1.19 - compared with the dismal €1.14 rate available at the end of July - this is expected to prompt Brits who spotted some of the bargains currently available in the Eurozone to look seriously at buying or moving abroad."

Mr Way added: "Continued upward pressure on UK house prices and more finance options beginning to creep back into the market could also encourage buyers to look at equity release for a foreign purchase or, for retirees, selling up and snapping a more affordable home in the Eurozone for cash."

11:08: GBP/EUR expected lower

Sasha Nugent at Caxton FX says:

"The euro certainly took advantage of a quiet day for the UK yesterday, as the single currency managed to regain some its losses. Positive French production data could extend these gains, pushing the GBPEUR back down to 1.18. It will be difficult for the pound to withstand this momentum and so we see the GBPEUR declining further in today’s session."

10:30: RBS warn of sterling weakness ahead

Read our morning report on the latest forecasts issued by RBS. "We believe there is a risk that business survey data are exaggerating the pace of recovery and that consumer spending will fail to maintain the recent pace of recovery given weak real income growth," says Paul Robson at RBS. See these forecasts here.

10:18: GBP bias is higher in short term

Sterling has certainly taking a breather over the course of the past 24 hours.

Nevertheless, Emmanuel Ng at OCBC Bank says he is biased towards more Pound Sterling upside:

"The GBP-USD may still remain biased higher in the near term given the weakened state of the broad dollar 9watch UK labor market numbers on Wed for domestic influences) with initial resistance levels expected towards the 1.5730-1.5780 neighborhood while key support is expected towards the 200-day MA (1.5492)."

10:00: Support for GBP/USD at 1.5565

Gareth Berry at UBS is forecasting further positive momentum for GBP/USD:

"The pair is moving higher, testing the strong resistance range at 1.5718/50. A closing break above this would be further positive. Support is at 1.5565."

08:54: The best year for job creation since 2007

Manpower said 2013 is on course to be the best year for job creation in the UK since 2007 as businesses take on new staff.

James Hick, managing director of Manpower in the UK, said:

"The jobs market has suddenly become the hottest economic indicator in town.

"Our survey shows that it’s going to take a while before we get to a situation where 750,000 new jobs are created. But it also reveals that 2013 has been a game-changing year for the UK jobs market."

This is strongly GBP positive - if the unemployment rate falls faster than expected then the Bank of England will consider raising interest rates; boosting demand for the UK currency.

08:15: UK Housing Market; RICS Figures at Highest Since 2006

Midnight saw the release of the latest set of housing data from The Royal Institution of Chartered Surveyors (RICS) which confirmed the UK housing industry continues to accelerate.

RICS tell us that their house price balance climbed to +40 from a slightly upwardly revised +37 in July, staying at its highest since November 2006.

Over the coming year, house prices are forecast to rise by 2.2 percent.

The average number of sold properties per surveyor rose to 17.9 over the last three months, the highest since January 2010.