BLBG:Pound Rises Second Day Versus Dollar Before Services Data
The pound rose for a second day versus the dollar before a report that economists said will show U.K. services output expanded for a second month in February.
Sterling was little changed against the euro. A gauge of services activity was at 51, from 51.5 in January, according to the median of 29 estimates in a Bloomberg News survey. A reading above 50 indicates expansion. U.K. government bonds fell for a second day before the Debt Management Office auctions 4 billion pounds ($6.06 billion) of gilts maturing in 2018.
“There would be more of a positive response in the pound to better data this morning,” said Steve Barrow, head of Group of 10 research at Standard Bank Plc in London. “There’s been a lot of selling of sterling already. It seems a little less sensitive now to bad news.”
The pound rose 0.2 percent to $1.5140 as of 8:48 a.m. London time, after strengthening 0.5 percent yesterday. It slid to $1.4986 on March 1, the lowest level since July 2010. Sterling traded at 86.17 pence per euro.
Sterling also gained versus the U.S. currency as a separate report showed U.K. retail sales rose at the fastest pace in more than three years in February.
Sales at stores open at least 12 months, measured by value, increased 2.7 percent from a year earlier, the British Retail Consortium said in an e-mailed report today. Excluding distortions caused by the timing of the Easter holidays, that’s the biggest increase since December 2009.
Pound’s Slide
The pound has depreciated 5.3 percent this year, the worst performer among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar gained 2.5 percent and the euro rose 1.3 percent.
The benchmark 10-year gilt yield added two basis points, or 0.02 percentage point, to 1.92 percent. The 1.75 percent bond maturing in September 2022 fell 0.135, or 1.35 pounds per 1,000- pound face amount, to 98.51.
The U.K. last sold securities maturing in 2018 on Feb. 14 at an average yield of 1.28 percent. The five-year gilt yield rose one basis point to 0.85 percent today.
U.K. government bonds lost 0.5 percent this year through yesterday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. German bonds dropped 0.3 percent and Treasuries fell 0.2 percent.
To contact the reporter on this story: Neal Armstrong in London at narmstrong8@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
