DailyFX.com -

Talking Points:

  • UK’s Osborne says BoE will control mortgage sizes
  • Osborne warns of possible housing markets risk
  • GBP/USD falls 45 pips from a 2-week high

Want to trade with proprietary strategies developed by FXCM? Find out how here.

The Pound declined in Forex markets as UK Chancellor Osborne prepares to give the Bank of England power over mortgage lending risks. The BoE will control the size of mortgages compared to incomes and house values to provide stability to the housing market. Osborne will say that current housing market doesn’t pose an immediate threat but could in the future, according to the text from the speech he will deliver tonight.

An expanding housing market or rising housing prices may prompt a central bank to raise interest rates. Therefore, non-monetary measures to cool the housing market may allow the BoE to refrain longer from raising interest rates. That could be the reason why the Pound declined sharply around the time of the release of the comments from the upcoming speech.

GBP/USD 1-Minute: June 12, 2014

Pound Declines Surround Announcement of BoE Mortgage Powers

The Pound declined 50 pips against the US Dollar near the time of the announcement, coming down from a 2-week high set earlier today at 1.6859. Currency Strategist Ilya Spivak recently entered a short position in GBP/USD following a retest of a rising trend line.

GBP/USD Daily by Ilya Spivak

Pound Declines Surround Announcement of BoE Mortgage Powers

Charts created by Baruch Spier and Ilya Spivak using Marketscope 2.0. Add DailyFX Support/Resistance to your charts at FXCM Apps.

-- Written by Baruch Spier, DailyFX Research. Feedback can be sent to bbspier@fxcm.com .

Related Articles
  1. Investing News

    China’s Forex Reserves Dropped Significantly

    China’s forex​ reserves dropped by a record $93.9 billion at the end of August to $3.56 trillion because the Central Bank has been selling dollars to provide a cushion to the falling yuan​
  2. Forex

    The Pros and Cons of a Fully Convertible Rupee

    Amid the rising economic power of India, the talks of making the Indian currency fully convertible are gaining momentum. We look at the pros and cons.
  3. Forex Fundamentals

    Chinese Yuan an Unlikely Reserve Currency

    As the world's second largest economy, China's challenge to America’s dominance includes a push to make the yuan (RMB), the world’s reserve currency. Whether it can do that now is unclear.
  4. Economics

    How Currency Enforcement Helped Sink The Trans-Pacific Partnership (TTP)

    One particular barrier to trade that has received much attention of late and caused delays in negotiations of the TPP is exchange-rate manipulation, by which a country artificially devalues its ...
  5. Forex

    Top U.S Forex News Sites

    Breaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
  6. Investing

    Financial News Comparison: Bloomberg Vs. Reuters

    Access to financial information has grown with the expansion of digital news. Bloomberg and Thomson Reuters lead the pack, claiming a majority of the business information market.
  7. Economics

    Who Benefits From South Korea's Lowered Interest Rates?

    South Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
  8. Forex Education

    The Top Uses For P2P Currency Exchange

    Peer-to-peer (P2P) currency exchange networks offer a viable and cheaper alternative for buying and selling currencies.
  9. Forex

    Steps To Open An Offshore Forex Account

    Here is a simple breakdown of how to open an offshore forex account for US-based users, including legal requirements.
  10. Entrepreneurship

    Top Forex Trading Apps

    A brief overview of the top apps that help forex traders with on time information, charts and more.
Trading Center