BLBG:Pound Weakens Against Dollar Before Service-Sector Report
The pound weakened against the dollar, approaching the lowest level in more than five months, before a report that economists said will show U.K. services shrank for a second month in January.
Sterling appreciated for a second day versus the euro. A gauge of services increased to 49.5 from 48.9 in December, according to the median estimate of 33 analysts in a Bloomberg News survey. A reading below 50 indicates contraction. The U.K. Debt Management Office is scheduled to sell 1.1 billion pounds ($1.73 billion) of inflation-linked gilts maturing in 2024.
The pound fell 0.2 percent to $1.5735 at 7:41 a.m. in London. The U.K. currency declined to $1.5675 on Jan. 28, the lowest since Aug. 17. Sterling strengthened 0.1 percent to 85.64 pence per euro. It depreciated to 87.17 pence on Feb. 1, the weakest since Oct. 31, 2011.
The pound has weakened 3.7 percent this year, the second- worst performer after the yen among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro strengthened 2.3 percent and the dollar dropped 0.2 percent.
U.K. 10-year break-even rates, a measure of inflation expectations, rose to 3.25 percentage points yesterday, the highest since April 2011.
U.K. government securities have handed investors a loss of 1.6 percent this year through yesterday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. German bunds dropped 1.4 percent and Treasuries fell 0.8 percent.
To contact the reporter on this story: Emma Charlton in London at echarlton1@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
