By Gavin Finch Dec. 11 (Bloomberg) -- The British pound rebounded from an all-time low against the euro as investors judged its losses were excessive. The U.K. currency snapped a three-day decline after its 14- day relative strength index, a technical chart used by traders, fell to 30.9. A reading below 30 indicates it has weakened too far and a change in direction is imminent. The pound yesterday slipped to a record 88.23 pence per euro, taking its loss this year to 16 percent as the economy slipped into a recession. “Because it’s a volatile market you’ll see people take profits fairly quickly,” said Neil Mellor, a currency strategist in London at Bank of New York Mellon, the world’s largest custodian of assets with $23 trillion. “It’s not the sort of market that you’re likely to see a sustained trend for that very reason.” The pound strengthened to 87.75 pence by 10:20 a.m. in London, from 88.08 pence yesterday. Against the dollar, the pound climbed to $1.4966, from $1.4785. The Bank of England reduced its benchmark interest rate to 2 percent from 5.5 percent this year as it tried to fend off the U.K.’s first recession in 17 years. The European Central Bank cut its main rate to 2.5 percent on Dec. 4. British consumers’ predictions for inflation in the next year recorded the biggest drop since at least 1999 in November as the economic slump intensified, a survey for the Bank of England showed today, strengthening the case for a further reduction from the central bank. To contact the reporters on this story: Matthew Brown in London on mbrown42@bloomberg.net

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