The pound jumped to its strongest level in more than a month against the euro after the imposition of a levy on bank deposits in Cyprus threatened to throw Europe back into crisis, fueling demand for U.K. assets as a haven. Sterling climbed by the most in five weeks against the currency shared by 17 European nations. Cypriot President Nicos Anastasiades bowed to demands by euro-area finance ministers to raise 5.8 billion euros ($7.5 billion) by taking a piece of every bank account in the island nation. U.K. government bonds gained, pushing down 10-year yields to the lowest this year. House prices rose for a third consecutive month in March, Rightmove Plc said. “This is basically a euro story and something that explains the move in sterling,� Ulrich Leuchtmann, head of currency strategy at Commerzbank AG in Frankfurt said. “Euro- sterling is a choice between a rock and a hard place.� The pound advanced 1 percent to 85.62 pence against the euro at 9:11 a.m. London time, after jumping by as much as 1.4 percent to 85.31 pence, the strongest level since Feb. 11. Sterling added 0.2 percent to $1.5137 for a fourth day of gains. The U.K. currency has advanced 1.6 percent in the past week, the best performer among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro fell 0.8 percent and the dollar was little changed. The yield on the 10-year gilt fell five basis points, or 0.05 percentage point, to 1.8 percent, after being as low as 1.86 percent, the least since Dec. 31. Two-year gilt yields declined two basis points to 0.21 percent. U.K. government bonds earned 0.2 percent this month through March 15, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. To contact the reporter on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net; Lucy Meakin in London at lmeakin1@bloomberg.net To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net. NI FRX NI UK NI GLT NI MARKETS

Source