The pound rose against the euro, snapping a two-day decline, before a report economists said will show U.K. construction output expanded in April. Sterling was about one cent from an eight-month high versus the dollar. A gauge of building activity based on a survey of purchasing managers by Markit Economics and the Chartered Institute of Purchasing and Supply dropped to 54 from 56.7 in March, according to the median of 11 economist estimates in a Bloomberg News survey. A reading above 50 indicates expansion. A separate report may show U.K. mortgage approvals fell in March. The pound appreciated 0.4 percent to 81.32 pence per euro at 9 a.m. London time. It reached 81.23 pence on April 30, the strongest since June 2010. Sterling was little changed at $1.6201 after climbing to $1.6302 on April 30, the highest level since Aug. 31. Sterling has appreciated 3 percent in the past three months, the best performer of the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar was little changed and the euro climbed 0.5 percent. The 10-year gilt yield fell two basis points to 2.08 percent. Gilts have handed investors a loss of 1.2 percent this year, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. U.S. Treasuries were little changed and German bunds gained 1.4 percent, the indexes show. To contact the reporter on this story: Keith Jenkins in London at kjenkins3@bloomberg.net To contact the editors responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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