The pound strengthened against the euro before a report that economists said will show the U.K. construction sector shrank at a slower pace in January. Sterling appreciated from near the weakest level in more than 15 months versus the 17-nation common currency. Markit Economics and the Chartered Institute of Purchasing and Supply’s index of construction activity rose to 49.2 from 48.7 in December, according to a median forecast of 11 analysts in a Bloomberg News survey. A reading below 50 indicates contraction. The U.K. currency was little changed against the dollar. The pound strengthened 0.2 percent to 86.78 pence per euro as of 7:39 a.m. in London. It depreciated to 87.17 pence on Feb. 1, the weakest since Oct. 31, 2011. Sterling traded at $1.5712. It dropped to $1.5675 on Jan. 28, the lowest since Aug. 17. The pound has weakened 4.1 percent this year, the second- worst performer after the yen of 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro strengthened 3.3 percent and the dollar dropped 0.4 percent. U.K. government securities have handed investors a loss of 1.9 percent this year through Feb. 1, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. German bunds dropped 1.7 percent and Treasuries fell 1.1 percent. To contact the reporter on this story: Anchalee Worrachate in London at aworrachate@bloomberg.net To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net

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