BLBG:Pound Advances Versus Dollar on Consumer Confidence Data, Greek Swap Deal
The pound advanced to the strongest in two months versus the dollar after a report showed U.K. consumer confidence rose to the highest in seven months in January.
Sterling weakened against the European common currency after Greek Prime Minister Lucas Papademos said progress had been made in bondholder debt-swap talks at the center of efforts to stem the euro-area financial crisis. Gilts fell as stocks gained, reducing demand for the relative safety of U.K. government bonds.
The pound rose 0.3 percent to $1.5757 at 9:31 a.m. London time, after touching $1.5775, the strongest level since Nov. 30. That extended its advance to 1.4 percent this month. It depreciated 0.1 percent to 83.75 pence per euro, headed for a monthly decline of 0.4 percent.
The FTSE 100 Index of shares snapped a two-day decline, gaining 0.6 percent and the Stoxx Europe 600 index rose 0.7 percent.
A gauge of sentiment by GfK NOP Ltd. climbed four points from December to minus 29, the strongest reading since June. Consumers’ outlook for the economy and their personal finances also improved. Separate data today showed U.K. mortgage approvals rose less than economists forecast in December and consumer credit fell the most on record.
Sterling has dropped 1.1 percent this year, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies. The dollar declined 2.6 percent and the euro slid 0.7 percent.
The 10-year gilt yield climbed three basis points to 2.01 percent. It dropped to a record 1.917 percent on Jan. 18. Two- year notes were three basis points higher at 0.39 percent.
Gilts have handed investors a 0.1 percent return so far this year, matching German government bonds and underperforming Treasuries, which gained 0.2 percent, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies.
The U.K. plans to auction as much as 7.25 billion pounds of bonds and bills this week.
To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net.
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net.
