The pound rose against the dollar, snapping a three-day decline, after earlier gains in stocks revived demand for riskier currencies. Sterling also climbed against the euro and the yen after the Daily Telegraph reported European finance ministers plan to discuss the pound’s decline at the Group of Seven meeting in Rome today. The benchmark FTSE 100 Index of equities earlier rose by the most in a week as investors bet governments will expand efforts to revive the economy. The earlier increases by the banks were “positive for the pound because the U.K. economy has a high exposure to the financial sector,” said Neil Jones, head of European hedge-fund sales in London at Mizuho Corporate Bank. “Some market participants covered short positions before the G-7 meeting. A weak pound gave the U.K. an advantage and there’s speculation some European ministers may raise this issue.” The pound climbed 0.8 percent to $1.4385 as of 5:56 p.m. in London, paring its decline this week to 2.7 percent. The currency advanced 0.7 percent against the euro to 89.55 pence, trimming its drop since Feb. 6 to 2.3 percent. It strengthened 1.6 percent to 131.89 yen, for a five-day slide of 2.9 percent. French and German finance ministers plan to confront Chancellor of the ExchequerAlistair Darling at the G-7 meeting today over sterling’s decline and ask him to consider action to boost the pound, the Telegraph reported, without saying where it got the information. The currency tumbled 26 percent against dollar and 23 percent versus the euro last year. Gilts Fall The pound’s trade-weighted index, a gauge of its performance against currencies of Britain’s trading partners including the yen, Swiss franc, euro and dollar, rose to 74.47 today, from 73.81 yesterday. The measure was at 76.27 a week ago. The FTSE 100 increased as much as 2.1 percent, before ending the day 0.3 percent lower after Lloyds Banking Group Plc said it expects HBOS Plc to report a 10 billion-pound ($14 billion) pretax loss. President Barack Obama’s housing plan will use government money to help reduce interest rates for struggling borrowers, and he will ask lawmakers to approve more ways to change mortgages, according to a person briefed on the proposal. Gilts fell today, with the two-year note paring the biggest weekly increase in almost two months and snapping four days of gains. The yield advanced 11 basis points today, the biggest one- day rise since Feb. 3, to 1.32 percent. The 10-year yield slid 39 basis points in the week to 3.56 percent. The 4.50 percent security maturing in March 2019 climbed 3.34, or 33.4 pounds per 1,000-pound face amount, to 107.90. Yields move inversely to bond prices. ‘Risk Appetite’ Gains by sterling and in gilt yields may be limited as economic reports next week are forecast to show consumer price inflation declined and retail sales growth slowed in January. “The decline in gilt prices today is a product of rising risk appetite,” said Richard McGuire, a senior fixed-income strategist in London at Royal Bank of Canada. “People in the market are paring back some bond bullishness we’ve seen earlier in the week. Going forward, the poor fundamental backdrop remains decidedly conducive for fixed-income securities.” The yield difference between two- and 10-year notes widened to 236 basis points yesterday, the most since Bloomberg started compiling the data in 1992. It was at 224 basis points today. The average in the past five years was nine basis points.

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