BLBG:Pound Rises Toward Four-Week High as U.K. House-Prices Increase
The pound strengthened toward a four-week high versus the dollar after an industry report showed U.K. house prices increased for a ninth month in October.
Britain’s currency appreciated versus most of its 16 major counterparts as the data added to evidence the economy is strengthening. Gross domestic product grew 0.8 percent in the third quarter, the most since 2010, the government said last week. Millions of commuters were being advised to stay at home today as the worst storm for five years forced rail operators across much of southern Britain to cancel morning rush-hour services. U.K. government bonds declined.
“The U.K. data should continue to be pretty good,” said Lutz Karpowitz, a senior currency strategist at Commerzbank AG in Frankfurt. “The GDP data last week were pretty strong, so this is something which could lead to some more sterling strength.”
The pound appreciated 0.2 percent to $1.6199 at 9:14 a.m. London time after rising to $1.6257 on Oct. 23, the highest since Oct. 1. Sterling strengthened 0.2 percent to 85.23 pence per euro after depreciating to 85.55 pence on Oct. 24, the weakest level since Aug. 29.
Average home values in England and Wales rose 0.5 percent this month, matching September’s increase, Hometrack said in a statement. Annual price inflation accelerated to 3.1 percent, the most since November 2007, according to the London-based property researcher.
Retail Sales
A gauge of annual retail sales growth fell to 32 in October from 34 last month, according to a Bloomberg News survey before the Confederation of British Industry releases the data today.
The pound gained 3.3 percent in the past three months, the best performer of 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro rose 1.8 percent, while the dollar weakened 2.5 percent.
The benchmark 10-year gilt yield climbed one basis point, or 0.01 percentage point, to 2.62 percent after falling 10 basis points last week. The 2.25 percent bond due in September 2023 fell 0.065, or 65 pence per 1,000-pound face amount, to 96.785.
Gilts lost 2.2 percent this year through Oct. 25, according to Bloomberg World Bond Indexes. Treasuries fell 1.8 percent and German securities slid 1.4 percent.
To contact the reporter on this story: Emma Charlton in London at echarlton1@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
