The U.K. pound strengthened against the euro, heading toward the strongest level in more than six weeks, before a summit of European leaders this week that investors say may decide the fate of the European currency.
Sterling was little changed versus the dollar. European Union government chiefs plan to meet for the second time in a month on July 21, aiming to break a deadlock over a new Greek rescue. Italian and Spanish 10-year bond yields surged to euro- era records yesterday while German bunds rallied as contagion from the sovereign-debt crisis spread, piling pressure on Europe’s leaders to contain the turmoil.
The pound climbed 0.2 percent to 87.71 pence per euro as of 7:42 a.m. in London, after reaching 87.05 pence yesterday, the strongest level since May 31. It traded at $1.6069 from $1.6058 yesterday.
Britain’s currency has dropped 6.8 percent in the past 12 months against nine developed-market peers tracked by Bloomberg Correlation-Weighted Currency Indexes, the second biggest decline after the dollar’s 12 percent drop.
To contact the reporters on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
