Investing.com - Sterling was a mixed bag on Thursday, despite data showing house prices in August reached their highest level in 2017.
The pound fell against the euro as the European Central Bank left interest rates unchanged and hinted at a tapering announcement in the autumn, while it momentarily climbed above $1.31 following the release of weak jobs data from the US Labour Department.
By 13:05 GMT, GBP/USD climbed 0.48% to 1.3105
House price growth in the UK unexpectedly hit an eight month high in August according to data from mortgage lender Halifax.
The Halifax House Price Index showed on Thursday that house prices grew 2.6% year-on-year, versus the consensus figure of an unchanged 2.1%.
The managing director of Halifax Community Bank, Russell Galley stated that these figures showed buoyancy was returning to the market on the back of unemployment data falling to 42 year lows.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.82% at 91.25. The dollar tumbled following a jump in initial jobless claims to 298,000 last week.
On Wednesday, President Trump closed a surprise deal with the Democrats that has extended the debt ceiling until December. However, Vice Chairman of the US Federal Reserve Stanley Fischer announced his resignation would take effect in October, further clouding the Federal Reserve’s position on monetary policy.
The euro jumped more than 1% against the greenback, EUR/USD was 1.2042 on Thursday afternoon.
With no change in the ECB’s monetary policy statement, investors watched for indications of when the bank would begin winding down of the asset purchase programme (APP) during the ECB President Mario Draghi’s press conference, which followed the monetary policy statement.
Draghi stated that a decision on whether to reduce or taper the APP would be decided in autumn, leading many to believe the announcement will come in October.
Ahead of the ECB rate decision, the euro was steady at 0.9152. Following the decision to keep rates unchanged, at 13:05 GMT, EUR/GBP was 0.9188, a jump of 0.56%.
The pound was unchanged against safe haven currencies. GBP/CHF was 1.2475, while GBP/JPY was 142.45.
GBP/CAD slipped 0.10% to 1.5926. The Loonie surged following the Bank of Canada’s surprise decision to raise rates again, this time 0.25% to 1.00%.
Against commodity currencies, sterling held steady. GBP/AUD was almost unchanged at 1.6301. GBP/NZD was up 0.16% at 1.8139.
Investors will be watching the progress of the debate on the Repeal Bill on Thursday afternoon, which will transfer existing EU legislation into UK law in time for the UK's departure from the European Union.
The opposition Labour Party has suggested it will reject the bill without amendments, and labelled it a ‘power grab’ by the Conservative government. This will be the biggest test to Prime Minister Theresa May’s leadership since the shock election result in June.