BLBG: Pound Advances Versus Dollar as U.K. Consumer Confidence Climbs
The pound climbed against the dollar after a report showed confidence among U.K. consumers increased to the highest level since May.
The pound snapped a four-day decline as Britain’s biggest clothing retailer, Marks & Spencer Group Plc, reported fourth- quarter sales that beat analysts’ estimates. The U.K. currency headed for its first quarterly gain versus the euro since June after the Bank of England cut its benchmark rate to a record low and began buying government bonds and corporate debt to ease borrowing costs.
“We like sterling now that the pace of deterioration in the U.K. may be starting to stabilize,” said David Woo, the head of currency strategy in London at Barclays Plc. “There are compelling reasons to believe sterling may be starting to find the bottom against the euro.”
Sterling advanced 0.4 percent to $1.4328 by 12:12 p.m. in London, paring its loss this quarter to 1.8 percent. The British currency weakened 0.6 percent to 93.03 pence per euro, trimming its gain this year to 2.5 percent. It dropped 5.1 percent this month.
Market researcher GfK NOP’s index of consumer confidence rose five points to minus 30 in March or the highest since May, the company said in a statement today. The survey of 2,003 people was conducted between March 6 and March 15.
Marks & Spencer climbed as much as 13 percent in London trading after reporting sales at stores open at least a year declined 4.2 percent in the 13 weeks ended March 28. The median estimate of 14 analysts surveyed by Bloomberg News was for a 6.8 percent slide.
Brown’s Views
U.K. Prime Minister Gordon Brown called on the Group of 20 nations to create more than 20 million jobs as a way to pull the world economy out of recession.
“We must take the action necessary to prevent the suffering of the past in mass long-term unemployment and save and create more than 20 million jobs,” Brown said in London today before meetings this week with G-20 leaders.
Government bonds rose, sending the 10-year yield to its lowest level in a week. The yield on the two-year note fell one basis point to 1.20 percent. The 4.25 percent security due in March 2011 climbed 0.02, or 20 pence per 1,000-pound ($1,432) face amount, to 105.86. The 10-year note yield fell two basis points to 3.16 percent. Bond yields move inversely to prices.
