The pound rose to the highest level in eight weeks against the dollar after a report showed U.K. retail sales (UKRVINFM) climbed in July more than economists predicted, adding to signs the economic recovery is gathering pace.
Sterling advanced for a fifth day against the euro, reaching the strongest level in six weeks. Sales including fuel climbed 1.1 percent from June, when they increased 0.2 percent, the Office for National Statistics said. The median prediction of 21 economists was for a 0.7 percent gain. U.K. 10-year bonds were little changed.
“It’s consistent with all the data that has come out recently,” said Adam Cole, head of Group-of-10 foreign-exchange strategy at Royal Bank of Canada in London. “We are generally bullish on sterling.”
The pound gained 0.5 percent to $1.5579 at 10:09 a.m. London time after reaching $1.5588, the highest since June 19. The U.K. currency appreciated 0.3 percent to 85.39 pence per euro after touching 85.26 pence, the strongest since July 4.
The pound gained 1.3 percent in the past month, according to Bloomberg Correlation-Weighted Indexes that track 10 developed-nation currencies. The euro lost 0.3 percent, while the dollar slipped 2.2 percent.
The benchmark 10-year gilt yielded 2.64 percent after reaching 2.66 percent yesterday, the highest since Oct. 28, 2011. The price of the 1.75 percent bond due in September 2022 was at 92.88.
Gilts lost investors 4.3 percent this year through yesterday, Bloomberg World Bond Indexes show. German securities dropped 2 percent and Treasuries declined 3.1 percent.
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