BLBG:Pound Gains Versus Euro as U.K. Construction Index Improves; Gilts Advance
The pound rose for a sixth day against the euro as an industry report showed construction rose to an 11-month high in February, boosting speculation the U.K. will avoid a recession.
Sterling posted its longest winning streak versus the 17- nation currency since November and has appreciated 2 percent against the 17-nation currency since Feb. 23. The U.K. will sell as much as 4.5 billion pounds ($7.2 billion) of bills today. Ten-year gilts gained for the first time in three days.
“This morning’s data will probably add to the outperforming tone we have seen on sterling against the euro throughout the week,” said Audrey Childe-Freeman, global head of currency strategy at JPMorgan Private Bank in London.
Sterling strengthened 0.2 percent to 83.23 pence per euro at 10:30 a.m. London time after reaching 83.18, the most since Feb. 20. The pound weakened 0.2 percent to $1.5932 after gaining 0.8 percent over the previous three days.
The construction gauge, based on a survey of purchasing managers rose to 54.3 from 51.4 in January, Markit Economics Ltd. and the Chartered Institute of Purchasing and Supply said. That’s the highest since March 2011. The median estimate of economists in a Bloomberg survey was 51.3.
Sterling has dropped 0.7 percent in 2012, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies. The dollar weakened 3.4 percent and the euro fell 0.8 percent.
The 10-year gilt yield dropped one basis point, or 0.01 percentage point, to 2.21 percent. The 4 percent bond due March 2022 rose 0.095, or 95 pence per 1,000-pound face amount, to 116.035.
Gilts have returned a 1.5 percent loss this year, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. German bunds, Europe’s benchmark government securities, have dropped 0.1 percent.
-- Editors: Mark McCord, Nicholas Reynolds
To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
