Sterling was firmer against the dollar and steady versus the euro on Thursday, drawing support from an unexpected rise in UK house prices with dollar selling to meet month-end requirements likely to help it retain gains. The pound advanced as high as $1.6152 versus the dollar after data showed UK house prices rose unexpectedly for the second consecutive month in March.
Data from mortgage lender Nation-wide showed house prices rose 0.5 percent this month, defying economists' forecasts for a fall of 0.1 percent. Traders said sterling was also helped by talk of good fix-related demand scheduled to hit later in the day along with robust demand from Swiss names. Investors expect stock market investors to sell the dollar as part of hedging requirements at month-end.
Sterling was up 0.4 percent against the dollar at $1.6138, pulling further away from a two-month low of $1.5937 hit earlier this week. A sustained break and close above the 55-day MA around $1.6100 would signal a re-test of the $1.6180/90 area. The euro was flat at 87.85 pence, staying well below a five-month high of 88.365 pence struck on Tuesday. The pound also rose against the yen to its highest in more than two weeks, at 133.85 yen. The Japanese currency briefly hit a 10-month lows against the euro while the dollar was supported well above recent record lows.
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