The pound strengthened from near a 2 1/2-year low against the dollar amid speculation a U.S. payrolls report today will show employers added fewer jobs last month than some economists predict. Sterling was little changed versus the euro, holding a weekly drop that pushed it toward the weakest level since October 2011. BlackRock Inc. (BLK) said it sold the U.K. currency after the Bank of England left its asset-purchase program unchanged yesterday, citing concern Britain’s leaders will struggle to stimulate growth. Gilts were also little changed, with 10-year yields set for the biggest weekly increase since the start of the year. “Pound-dollar has been under pressure of late, largely because of U.K.-centric problems, but a wider appetite for the dollar on the back of upside surprises on U.S. data has also played a part,� said Daragh Maher, a senior foreign-currency strategist at HSBC Holdings Plc in London. “The market appears to be paring its long position in the dollar just in case those non-farm payrolls come in shy of the upbeat levels� predicted, he said. The pound rose 0.2 percent to $1.5039 at 11:59 a.m. London time after sliding to $1.4967 yesterday, the weakest level since July 2010. Sterling was little changed at 87.27 pence per euro, set for a 0.8 percent decline on the week. U.S. employers added 165,000 jobs last month, up from 157,000 in January, according to a Bloomberg News survey before the Labor Department report at 8:30 a.m. in Washington. The jobless rate held at 7.9 percent, a separate survey showed. Pound’s Slide Sterling has dropped 5.9 percent this year, the second- worst performer after the yen among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro rose 1.9 percent and the dollar gained 2.6 percent. “We sold sterling to express our view, given our already underweight position in gilts,� Scott Thiel, the head of global fundamental fixed-income at BlackRock, the world’s biggest money manager, said in e-mailed comments. BlackRock is cautious on the U.K. because of “consistently above-target inflation, the coalition government struggling to maintain a cohesive message� and London’s waning dominance as an international business center, he said. Prime Minister David Cameron’s commitment to cutting Britain’s debt isn’t working and is leaving the country in a similar position to the “weaker� euro-area nations, Goldman Sachs Asset Management Chairman Jim O’Neill said in an interview with Bloomberg Television’s Mark Barton in Cernobbio, Italy. Increasing Costs It is unclear what further quantitative easing by the Bank of England would do to improve the U.K. economy as the weakness of the pound is increasing import costs and “cramping� consumers, O’Neill said, referring to the central bank’s bond- purchase program. Benchmark 10-year gilts headed for a weekly decline after Bank of England policy makers kept their asset-purchase target at 375 billion pounds yesterday. The decision was forecast by 29 of 39 economists surveyed by Bloomberg News. The remainder predicted increases to as much as 425 billion pounds. The 10-year gilt yield was little changed at 2.02 percent, headed for a 15 basis point, or 0.15 percentage point, increase since March 1. The rate on two-year securities was at 0.25 percent. U.K. government bonds lost 1.4 percent this year through yesterday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. German bunds and Treasuries both dropped 0.8 percent. To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net. To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net.

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