2010.09.2006:53:00UTC+00British Pound Plunges To Near 8-week Low Against Euro

The British currency that traded at a 4-day low against the euro in early European trading on Monday fell to near an 8-week low after reports showed at 4:30 am ET that U.K.'s M4 money supply unexpectedly dropped in August and mortgage lending continued to slow in July.

The pound also remained lower and traded at a 4-day low against the currencies of U.S., Switzerland and the Japan.

A provisional data from the Bank of England showed today that U.K.'s M4 money supply decreased by a seasonally adjusted GBP 4.1 billion or 0.2% in August from the previous month. Economists had expected a monthly 0.2% rise. The twelve-month growth rate eased to 1.8% from 2.3% in July.

Data showed that M4 lending dropped GBP 18 billion or 0.7% in August. Year-on-year, the growth rate fell to 0.6% from 1.5% in July.

In addition, U.K.'s mortgage lending continued to slow in July, according to the Bank of England's latest Trends in Lending publication.

The bank said gross lending for house purchase was "little changed" and mortgage approvals for house purchase decreased slightly. The mortgage arrears rate fell further in the June quarter and lenders expect it to be broadly unchanged in the coming months.

The sterling declined further against the euro in European deals and it is currently trading near an 8-week low of 0.8410. The euro-pound pair closed last week's trading at 0.8346.

Against its U.S. and Swiss counterparts, the pound edged down in today's European session and is presently trading at 4-day lows of 1.5576 and 1.5646, respectively.

The pound-yen pair that closed last Friday's New York session at 1.3405, traded lower and as of now worth a new multi-day low of 133.39.

The U.S. NAHB housing market index for September is expected in the North American session today.

The Federal Reserve Open Market Committee is scheduled to meet on Tuesday and make an announcement regarding its near-term direction of monetary policy at 2:15 pm ET.

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