The Pound has been a weak performer over the last couple of days as we forex traders discussed. This is a result of the BOE's surprise last week coupled with general risk aversion in the markets. However this rationale is outweighing the steady flow of better than expected numbers - the latest being the RICS House Price Balance showing a -8% reading.
Are we to expect that there is sustainable UK housing appreciation? Hardly. If the US Federal Open Market Committee helps to set off a further round of treasury buying as they have in the past few auctions, then the JPY will continue to be the star performer here in the near term and we can expect downside momentum in GBP/JPY, which recently saw its attempt above the previous 162.50 area high firmly rejected.
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