BLBG:Pound Gains Third Day Versus Dollar as Mortgage Approvals Rise
The pound advanced for a third day against the dollar after an industry report showed bank lending for U.K. home purchases rose last month to the highest level since January.
Sterling climbed to the strongest against the yen since April last year amid speculation the Bank of Japan (8301) will step up stimulus measures to support growth. The number of loans banks approved for house purchases rose to 33,634 last month from 33,128 in October, the British Bankers’ Association said. U.K. government bonds were little changed.
“The U.K. economy may be weak but there are signs that it has probably gone through the worst,” said Stuart Cole, a currency analyst at Mizuho Corporate Bank Ltd. in London. “If you look at the fundamentals, the U.K. is not doing too badly and that should be supportive for the pound.”
The pound rose 0.3 percent to $1.6190 at 10:41 a.m. London time after rising to $1.6307 on Dec. 19, the highest since Sept. 21. The U.K. currency climbed 0.5 percent to 138.84 yen after reaching 138.85 yen, the strongest since April 11, 2011. Sterling was little changed at 81.95 pence per euro.
The BBA’s data showed the number of home-purchase loans bank approved increased for a fourth month. The gain this month was lower than the median estimate of 34,500 from a Bloomberg News survey of seven analysts.
The pound has appreciated 1.5 percent this year, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-market currencies. The euro declined 0.5 percent and the dollar fell 3 percent.
Annual Gain
The U.K. currency has risen 1.7 percent against the euro in 2012. If it finishes stronger than 83.34 pence, this will be the fourth year of gains, the longest winning streak since the introduction of the euro in 1999.
The yield on the benchmark 10-year gilt rose one basis point, or 0.01 percentage point, to 1.90 percent. The 1.75 percent bond due in September 2022 fell 0.115, or 1.15 pounds per 1,000-pound face amount, to 98.655.
Gilts returned 2.2 percent this year through yesterday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. German bunds gained 4 percent and Treasuries earned 2.1 percent.
To contact the reporters on this story: Anchalee Worrachate in London at aworrachate@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
