The pound reached its highest level in 15 months against the euro as debt-crisis concern deepened before France sells as much as 8 billion euros ($10.4 billion) of bonds today. The pound also rose against the South African rand, the Australian dollar and the Swedish krona. It fell against the dollar and the yen as stock losses spurred demand for haven currencies. Greek Prime Minister Lucas Papademos said his nation faces “the immediate risk� of a default if the European Union, International Monetary Fund and European Central Bank fail to agree on the next loan for the nation. Gilts fell for a fifth day after beating all 26 major government bond markets in 2011. “Relative to the euro zone, we feel that both the pound and the gilt market have the upper hand,� Standard Bank Plc analysts including Steven Barrow wrote in an e-mailed research note today. “For the pound, we target a move to 0.75 for euro- sterling this year. We would certainly not rule out a bigger rise if the euro-zone crisis escalates significantly.� The pound climbed 0.2 percent to 82.67 pence per euro at 9:45 a.m. London time after reaching 82.56 pence, the strongest since Sept. 13, 2010. Sterling fell 0.3 percent to $1.5574 and dropped 0.2 percent to 119.60 yen. The 10-year gilt yield (GUKG10) climbed one basis point, or 0.01 percentage point, to 2.07 percent after falling two basis points to 2.04 earlier today. Two-year note yields were also one basis point higher, at 0.41 percent. French Auction Sterling has risen 3.1 percent against a basket of nine developed-market peers in the past six months, making it the third-best performer after the Japanese yen and the U.S. dollar, according to Bloomberg Correlation-Weighted Indexes. France plans to sell securities maturing in October 2021, October 2023, April 2035 and April 2041 today. French 10-year bonds fell on each of the past six days, pushing the yield as high as 3.37 percent, the most since Dec. 9, and widening the spread over bunds. The French debt sale comes a day after Germany sold 4.1 billion euros of bonds, getting more bids than its maximum target of 5 billion euros. Gilts outperformed French bonds so far this year, handing investors a 0.5 percent loss compared with a decline of 1.3 percent from French debt, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. The pound rose 0.2 percent to 1.4738 Swiss francs before Swiss National Bank Philipp Hildebrand speaks about his wife’s August purchase of dollars at 4 p.m. in Zurich today. The pound has gained 1.1 percent against the franc this year and 3.3 percent in the past three months. To contact the reporter on this story: Anchalee Worrachate in London at aworrachate@bloomberg.net; To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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