BLBG: Pound Near 15-Month Low Against the Euro Before U.K. Manufacturing Report
The pound traded within half a penny of a 15-month low against the euro before a report that is forecast to show U.K. manufacturing growth stayed near the lowest in a year-and-a-half last month.
Britain’s currency rose against the dollar and the yen. A gauge of output probably reached 52.3 in June, according to the median estimate of 26 economists surveyed by Bloomberg, from 52.1 in May, which was the lowest since November 2009. Markit Economics and the Chartered Institute of Purchasing and Supply are scheduled to release the data at 9:30 a.m. in London.
The pound was little changed at 90.39 pence per euro as of 7:34 a.m. in London, from 90.34 pence yesterday in New York. It reached 90.69 yesterday, the weakest since March 2010. Sterling was 0.2 percent stronger at $1.6091 and climbed 0.3 percent to 129.73 yen.
Britain’s currency slid against the euro yesterday on bets a faltering economy will limit the policy makers’ scope to raise interest rates, as the European Central Bank lifts borrowing costs to curb inflation. A report yesterday showed U.K. consumer confidence fell more than economists forecast in June while the Bank of England’s Credit Conditions Survey said mortgage demand is predicted to drop in the third quarter.
Barclays Capital yesterday pushed back its forecast interest-rate increases, saying the central bank will now probably keep its main rate unchanged until May 2012. The bank, which previously forecast a rate increase in November, said the change reflects weaker than previously expected economic growth and recent comments from central bank officials.
Bank of England policy maker Adam Posen said on June 27 that a call by the Bank for International Settlements for higher rates worldwide to curb inflation was “nonsense.”
The pound has fallen 8.9 percent in the past 12 months, making it the second-worst performer among 10 developed-market currencies after the U.S. dollar, according to Bloomberg Correlation-Weighted Currency Indexes.
To contact the reporter on this story: Garth Theunissen in London gtheunissen@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
