Source: ForexYard
For GBP traders, the release of the Halifax HPI this week promises to inject some volatility into the marketplace. The HPI, a monthly index of home prices financed by the Halifax Bank of Scotland, is a leading indicator of the health of the British housing industry. With England still feeling the effects of the global recession, the changing value in home prices is a sure way for traders to determine where the economy is headed in the month ahead.
Last month, home prices in England rose by 1.4%. That was the 5th month in a row where prices increased by more then 1%, giving investors the impression that the British economy is headed in the right direction. The positive housing news was not able to save Sterling from loosing ground in the forex marketplace, especially against the Dollar.
This month, analysts are predicting a relatively modest figure of 0.6% for the HPI. If the forecasts indeed come true, this would mean housing prices increased marginally in the past month, a troubling sign for the Pound. Any figure below 1% will likely cause GBP to enter a bearish trend. At the same time, if the housing figure turns out to be in line with last month’s results, Sterling may be able to recoup some of its recent losses against the Dollar and Euro.
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