Investing.com - The pound rebounded on Monday following Friday’s reversal down. Strong lending data from the Bank of England on Monday morning helped lift the pound against most major currencies.
At 11:20 GMT, GBP/USD rose 0.40% to 1.3186. Prior to the lending data release cable sat at 1.3157.
The Bank of England released its lending figures for September on Monday showing that mortgage lending rose to 3.85 billion, down from 3.93 billion in August. The consensus figure had been a rise of 3.60 billion.
UK Net Lending fell to 5.5 billion, from 5.7 billion in the preceding month, which was revised up from 5.6 billion. The amount of lending is correlated to consumer confidence and spending.
Growth in unsecured consumer lending dropped to 9.9%, down from 10% in August.
Mortgage approvals were down on the previous month’s revised figure, yet higher than forecast. Mortgage approvals for September were 66.33K, down from the previous month’s 67.23K. The forecast figure was just 66.05K.
The stronger than forecast data bodes well for those in favour of an interest rate rise on Thursday when the Bank of England Monetary Policy Committee meet to vote on increasing rates.
The US dollar index, which measures the strength of the greenback against a trade-weighted basket of six major currencies, slipped 0.21% to 94.52.
The dollar, though largely lower, was still trading around a three month high on the back of strong economic growth in the third quarter. Data released on Friday showed that the economy grew 3.0% in the third quarter despite the adverse weather conditions, better than the 2.5% forecast.
Investors will be looking at the Fed’s preferred measure of inflation, the Core PCE, which will be released on Monday to further strengthen speculation of a rate hike in December.
Euro-zone economic confidence was at its highest point since 2001, helping to lift the struggling single currency, which has been blighted by domestic political issues.
The euro slipped on Friday following the declaration of independence by the Catalan government. Mariano Rajoy, Spain’s prime minister, responded to the declaration by sacking the Catalan government and imposing direct rule over the north-eastern region.
EUR/GBP was almost unchanged at 0.8830, while EUR/USD rose by 0.27% to 1.1639.
The pound rebounded against the safe haven and commodity currencies. GBP/JPY was up 0.29% to 149.73. GBP/CHF jumped 0.34% to 1.3146.
GBP/AUD was up 0.38% to 1.7176, while GBP/NZD climbed 0.75% to 1.9123.
GBP/CAD rose 0.50% 1.6908.
Monday is the deadline for the Northern Irish parties to reach an agreement in the devolved parliament. The power sharing government broke apart in December last year. If the Democratic Unionist Party (DUP) and Sinn Fein fail to reach agreement, then direct rule will resume from Westminster. The power sharing devolved government is thought to be crucial for the peace process to continue.