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Pound Gains for Third Day Versus Euro Before U.K. Output Report - (Bloomberg)

Posted by Chris Advincula on Nov 1, 2013 5:01:00 AM

The pound strengthened for a third day versus the euro before an industry report that economists said will show U.K. manufacturing output slowed in October.

Sterling was little changed against the dollar, heading for a weekly decline. Markit Economics will say its manufacturing index, based on a survey of purchasing managers, fell to 56.4 from 56.7 in September, according to the median forecast of analysts in a Bloomberg News survey. A reading above 50 indicates expansion. U.K. data yesterday showed consumer sentiment declined and house prices increased.

The pound gained 0.1 percent to 84.59 pence per euro at 7:25 a.m. London time after appreciating to 84.51 pence, the strongest level since Oct. 21. Sterling traded at $1.6032, down 0.8 percent versus the U.S. currency this week.

The pound climbed 1.1 percent versus the euro yesterday, the biggest gain since April 25, as speculation the European Central Bank will cut interest rates to revive growth undermined demand for the 17-nation shared currency.

Sterling has gained 4.2 percent in the past six months, the best performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar rose 0.8 percent and the euro climbed 4.1 percent.

U.K. government bonds returned 0.8 percent in the month through yesterday, according to Bloomberg World Bond Indexes. Treasuries and German bonds gained 0.5 percent. 


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