Sterling moved lower against the US dollar in opening trading as the US currency remains in favour among investors seeking safe-haven assets.
Improved figures on the mortgage front lifted sterling only temporarily, as the Bank of England published data that showed an increase in mortgage approvals in July. Mortgage approvals, considered a leading indicator of the UK housing market, increased to 48,720 in the seventh month of the year, an unexpected rise. A Bloomberg survey had predicted a fall to 46,500 from 47,600 in June. A separate report on consumer confidence in August from GkF NOP Social Research also failed to push sterling higher against the US currency. The index of sentiment rose by 4 points to -18, indicating that consumers are somewhat more confident of an economic recovery. A Bloomberg survey had forecast that the index would fall to -24 from -22 in July. GfK's director Nick Moon commented that 'a further fall would have made a double-dip recession seem a very real prospect', adding that the increase in confidence was an encouraging sign, although it 'merely reverses a similarly large drop in July'.
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