U.K. Mortgage Applications Slips to Record Low, Housing Downturn to Continue
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• GBPUSD – Mortgage approvals in the U.K. slipped to a record low reading of 21.086K in August, which suggests that the downturn in the housing sector may continue throughout the rest of the year. Declining home prices paired with tightening credit conditions has clearly taken a toll on the economy, and conditions only get worse as the financial sector remains under pressure. Stagnant growth paired with high inflation has left the BoE in a complex situation, and they may no longer be able to sit on the sidelines as the downturn in the economy accelerates. For more news and resources, visit our GBP/USD Forum.
• EURUSD – German manufacturing contracted for the second straight month in September, with the index falling to a fresh record low of 48.1 from 49.7 in August. Meanwhile, the services PMI contracted for the first time in seven months, which strengthens the argument that Europe’s largest economy will fall into a recession this year. Furthermore, manufacturing and services in the Euro-Zone contracted for the fourth consecutive month, with both indices falling to record lows as businesses continue to face slowing demands amid higher input costs. The manufacturing PMI plunged to 45.3 from 47.6, while the services PMI slipped to 48.2 from 48.5. Stagnant growth among in the Euro-Zone suggests that economic activity may remain subdued as the global economy cools, which could lead the ECB to lower the benchmark interest rate ahead of schedule. Discuss the topic and your trade ideas in the EUR/USD Forum.