Pound stronger on RICS data

The pound strengthened Tuesday after the Royal Institution of Chartered Surveyors reported that only 44.1 percent more estate agents said home prices fell last month that reported gains in prices, the most positive result in over a year and a half.

The possibility that the political situation in the UK is stabilizing after a meeting between Prime Minister Gordon Brown and members of the Labour Party also helped the pound.

The outcome of the meeting, during which Mr. Brown was reported to have agreed to some changes in his goals and leadership style, seemed to have quieted calls for Mr. Brown to resign after losses in recent local elections and resignations of several ministers.

At just after 11 a.m. in New York, the pound traded at 86.1p to the euro while it took $1.6258 to buy a pound and the yen traded at ¥158.6084 to the pound.

Meanwhile, the US dollar weakened as signs that the recession is easing reduced demand for the greenback.

Goldman Sachs (NYSE: GS) recommended that clients buy the euro rather than the dollar, saying that US interest rates, set by the Federal Reserve, will probably remain low for the foreseeable future despite speculation that the Fed could raise rates after fewer US jobs were reported lost in May by the Labor Department.

In late morning trade in New York, the dollar traded at $1.3998 to the euro, while the yen traded at ¥136.5622 to the euro and at ¥97.56 to the dollar.

Story link: Pound stronger on RICS data