Pound Spikes Up As U.K. Mortgage Lending Rises To 7-year High

The pound gained ground against its major rivals in European deals on Wednesday, as U.K. mortgage approvals increased more than expected in June and secured lending climbed most since 2008, in a sign of accelerating housing market.

Data from the Bank of England showed that the number of loan approvals for house purchase totaled 66,582 in June, up from 64,826 in May. It was forecast to increase marginally to 66,000.

Lending secured on dwellings increased GBP 2.6 billion versus GBP 2.4 billion rise in May. This was the biggest monthly growth since July 2008 and above GBP 2 billion growth forecast by economists. It gained 0.2 percent from May and 1.9 percent from last year.

The currency was also supported by rising European shares, which were buoyed by some positive earnings reports in Europe, as well as signs of stability in Chinese markets.

Investors' risk appetite has increased somewhat after Chinese authorities hinted at more policy easing to boost liquidity and pledged to buy shares to stabilize the market following record losses earlier in the week.

Meanwhile, investors await the FOMC decision due tonight for more insights about the timing of the Fed's first interest rate hike in nearly a decade.

The pound performed in a mixed way in Asian trading. While the pound held steady against the greenback and the yen, it dropped against the euro and the franc.

In European trading now, the pound appreciated to a 5-day high of 0.7060 against the euro, after having declined to 0.7098 at 9:45 pm ET. The pound is seen finding resistance around the 0.70 mark. At Tuesday's close, the pair was valued at 0.7081.

Survey data from GfK showed that German consumer confidence is set to stabilize in August.

The forward-looking consumer sentiment index came in at 10.1 points, unchanged from July. The score came in line with expectations.

The pound remained higher against the franc, trading at 1.5038, coming off from an early low of 1.4993. The next possible resistance for the pound may be located around the 1.51 area. The pair was worth 1.5021 when it ended Tuesday's trading.

The pound strengthened to 6-day highs of 193.55 versus the yen and 1.5648 versus greenback, reversing from its prior lows of 192.56 and 1.5587, respectively. On the upside, the pound is likely to eye resistance around 195.00 against the yen and 1.575 against the greenback. The pound ended Tuesday's trading at 192.80 against the yen and 1.5611 against the greenback.

In the New York session, U.S. pending home sales for June and crude oil inventories report for the week ended July 24, are set to be published.