BLBG:Pound Reaches 4-Month Low Versus Euro as Shop-Price Index Falls
The pound depreciated to the weakest in more than four months against the euro after a gauge of U.K. shop prices fell for the third month.
Sterling slid for a fourth day versus the dollar as investors awaited the Bank of England’s latest policy decision tomorrow, the second under new Governor Mark Carney. The British Retail Consortium-Nielsen Shop Price Index fell 0.5 percent in July from a 0.2 percent drop the previous month. The pound slid for a seventh day versus the common currency, the longest losing streak since January. Gilts fell for the first time in five days.
The pound lost 0.2 percent to 87.20 pence per euro at 8:23 a.m. London time after touching 87.26, the weakest since March 13. It was set for a 2 percent decline this month. The U.K. currency dropped 0.2 percent to $1.5205. The four-day losing streak is the longest since June 28.
The nine-member Monetary Policy Committee will keep its bond-purchase program at 375 billion pounds, according to all but one of 42 economists in a Bloomberg News survey. Officials will also hold the benchmark interest rate at a record low of 0.5 percent, a separate survey showed.
Sterling has weakened 1.4 percent in the past month, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies. The euro strengthened 0.7 percent and the dollar declined 1.4 percent.
The yield on the 10-year gilt rose three basis points, or 0.03 percentage point, to 2.34 percent. The 1.75 percent bond due September 2022 fell 0.21, or 2.10 pounds per 1,000-pound face amount, to 95.18.
Gilts lost 2.8 percent this year through yesterday, according to Bloomberg World Bond Indexes. German bunds lost 1.3 percent and U.S. Treasuries declined 2.6 percent.
To contact the reporter on this story: Neal Armstrong in London at narmstrong8@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
