The pound fell for a second day against the dollar before a report that economists said will show U.K. construction contracted for a fourth month in February. Sterling advanced against the euro after a report showed U.K. house prices rose for the first time in nine months in February. The pound dropped below $1.50 for the first time in 2 1/2 years on March 1 after a gauge of output in the manufacturing industry unexpectedly shrank. The pound fell 0.1 percent to $1.5026 at 7:33 a.m. London time. It slid to $1.4986 on March 1, the lowest level since July 2010. Sterling climbed 0.1 percent to 86.48 pence per euro after reaching 88.15 pence on Feb. 25, the weakest since October 2011. A gauge of factory output was 49 last month from 48.7 in January, Markit Economics and the Chartered Institute of Purchasing and Supply will say today, according to the median of 9 estimates in a Bloomberg survey. A reading below 50 indicates contraction. The pound has depreciated 5.4 percent this year, the worst performer among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar gained 3.2 percent and the euro rose 1.5 percent. House prices in England and Wales advanced 0.1 percent from January, the property researcher Hometrack Ltd. said in a statement today. U.K. government bonds lost 0.2 percent this year through March 1, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. German bonds dropped 0.3 percent and Treasuries fell 0.1 percent. To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net

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