UK mortgage approvals fall in worrying sign for UK housing market

There was 33,700 new mortgage approvals in the UK during July according to the British Banker Association, confirming some economists views that the housing market is due for another slump. Following the fall in the Nationwide house price index by 0.7%, new mortgage approvals were down from 34,580 in June.

In the Eurozone, industrial new orders maintained the surge in May reporting a 2.5% increase month on month in June, above expectations and the fifth consecutive monthly increase confirming the strength in the manufacturing sector. If only the Eurozone banking sector could follow suit.

The worst piece of data of the day award went to the US existing home sales, falling 27.2% in July to reach the lowest level since May 1995. Like the UK, the US has a high percentage of home owners compared to the Eurozone where renting is the norm, so this data paints a grim picture for the housing market in the stubbornly sluggish US economy.

After initially losing out on the housing data, the US Dollar recouped most of the losses however it was the fact that investors were initially selling US Dollars.

Recently the attitude has been to see bad economic news from around the world as an excuse to buy "safe-haven" currencies like the Japanese Yen and US Dollar. Intriguingly, the instant reaction to the home sales slump was to sell US Dollars in favour of Sterling and Euros. Whether the response marks a change of heart among investors will take time to confirm.

US new home sales and durable goods orders dominate the economic calendar today.