BRUSSELS (Alliance News) - The pound advanced against its major opponents in European deals on Wednesday, as a survey showed that UK lenders expect the demand of secured credit to households to increase slightly over the next three months.
The total amount of unsecured credit made available to households increased in the first quarter, driven by market share objectives and a greater appetite for risk, according to the Bank of England's credit conditions survey.
The secured credit made available to households was broadly unchanged in the three months to early March, and is expected to increase slightly in the second quarter, it showed.
The report raised speculation that the UK housing market is regaining momentum, supporting the case of an early hike by the BoE rather than later.
The UK stocks rose following a proposed takeover of BG Group by oil giant Royal Dutch Shell. The deal was valued at GBP47 billion, and the planned merger is expected to create USD2.5 billion of synergies a year.
The Bank of England begins its meeting today, with an announcement on interest rates due tomorrow. The bank is expected to maintain its current record low levels of 0.5% rate until next year.
Tuesday, the pound was higher against its major rivals, except the dollar, as UK service sector activity climbed to a 7-month high in March and the Confederation of British Industry upgraded UK growth forecasts in the first quarter. It was up by 0.41% against the euro, 0.32% against the franc and 0.13% against the yen.
The pound advanced to a 6-day high of 0.7275 against the euro, off early low of 0.7313. The next possible resistance for the pound may be located around the 0.74 zone.
Euro area retail sales declined in February for the first time in five months, in line with economists' expectations, data from Eurostat revealed.
Retail sales fell 0.2% from January, when they grew 0.9%, which was revised from 1.1% reported earlier.
The pound hit a 2-day high of 1.4941 against the greenback, after having fallen to 1.4805 at 5:00 pm ET. Continuation of the pound's uptrend may see it finding resistance around the 1.50 area.
The pound edged up to 178.99 against the yen, from an early 2-day low of 177.62. The pound is likely to test resistance around the 180.00 mark.
The Bank of Japan announced its decision to maintain status quo position with respect to its monetary policy. It decided to conduct money market operations such that monetary base increases at an annual base of 80 trillion yen.
The pound spiked up to a weekly high of 1.4361 against the Swiss franc, reversing from an early decline of 1.4287. The pound may challenge resistance around the 1.45 mark.
Swiss consumer prices dropped at a slower-than-expected pace in March, figures from the Federal Statistical Office showed.
The consumer price index fell 0.9% year-over-year in March, slightly faster than February's 0.8% decrease. Economists had expected a 1.1% decline for the month.
Looking ahead, at 8:00 am ET, US Federal Reserve Board Governor Jerome Powell is expected to speak on "Challenges for Monetary Policy" before the C. Peter McColough Series on International Economics hosted by the Council on Foreign Relations in New York. Subsequently, Federal Reserve Bank of New York President William Dudley will deliver a speech about the economy and monetary policy at the Reuters Newsmaker Event in New York at 9:30 am ET.
