French house prices are on the rise and gearing up for a better year in 2010

NEWS or noise? Over the last few days there have been a number of articles from various sources in the press that French property prices are on the rise.

An article today on Capital.fr claims that although asking prices were down by 0.4% in October vendors are tending to demand increasingly higher asking prices for new instructions. 

Another article published today by the move channel , a popular UK property portal, states that prices are now 2.8% higher than they were in April 2009. The source of these figures is the FNAIM, the French Institue of Estate Agents. They believe there is good reason to be optimistic and look forward to a more stable French property market in 2010.

According to Athena Mortgages, there was a 14% increase in mortgage completions in the third quarter compared to the previous.

However, both the dollar and the British pound have taken a hammering recently against the mighty Euro. In the last week, however, sterling has come back fighting but just can't seem to hold its position.

The Euro is closely correlated with risk so when investors are feeling gloomy and risk appetite is on the wane then the Euro tends to suffer a lot more than the pound. This was reflected in the 4% fall in the US Dow Jones and UK FTSE stock indexes and the 4% rise in sterling.  

The FTSE has bounced almost 2% already this morning and surprise, surprise sterling has dropped the same amount from the highs. So this week although the ECB rate announcement is the obvious focus, the stock markets hold the key.

A fall to €1.09 is likely in the next few days, but this doesn’t prevent another assault on €1.12+ levels later on.

Let's see.