U.K. Housing Gooses Spot Forex Market -- Sterling Rallies

Sterling is seeing a turnaround on the spot forex market -- at least for now. Spread betting and contracts for differences on the spot forex market should consider that the latest home prices out of Britain, sparking optimism that the housing market is firming up.

Indeed, the sterling comes on the heels of European Union criticism of the way the U.K. has been handling its deficit. However, the U.K. pound got a boost in forex trading on a vigorous defense. GFT's Boris Schlossberg reports in FX360 on Britain's self-defense:

UK Treasury Secretary Byrne vigorously defended the government’s actions stating that EU has “got its judgment wrong over the deficit.” The comments spurred a short squeeze which was aided further by much hotter than expected DCLG house prices which shot up 6.2% vs. 3.5% eyed indicating that UK housing sector is beginning to firm up.

While it is uncertain how long this rally will last, it is clear that, for now at least, forex traders appear ready to give the sterling a chance.