Pound gains versus euro before data

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UKpound

Reuters.

A woman passes by an outdoor advert with an image of the British pound bank note.

London - The pound rose versus the euro before a report today that analysts said will show U.K. manufacturing expanded in December, adding to evidence the economic recovery accelerated.

Sterling was little changed against the dollar after the government said 1 billion pounds ($1.66 billion) of mortgages had been sought under a policy of cheap home loans.

The pound rose against 13 of its 16 major counterparts last year amid speculation strength in the housing market will support economic growth.

A gauge of manufacturing was at 58.4 last month, matching the previous month’s reading, which was the highest since February 2011, according to a Bloomberg survey of analysts.

Sterling rose 0.2 percent to 82.88 pence per euro at 7:55 a.m. London time.

The pound was at $1.6573 after gaining 1.9 percent versus the US currency in 2013.

It climbed to $1.6603 earlier, the highest since August 2011.

The pound gained 6 percent in the past year, the third-best performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes, as a strengthening economy boosted speculation the Bank of England will need to raise interest rates sooner than it forecasts.

The euro appreciated 8.6 percent and the dollar rose 3.7 percent.

The British government received more than 6,000 mortgage applications during the first three months of its Help-to-Buy program, which guarantees loans to those who can only afford a small downpayment, Prime Minister David Cameron said.

Reports tomorrow are forecast to show house prices climbed and mortgage approvals increased in December.

Sterling will decline to $1.61 by the end of March and strengthen to 82 pence per euro, according to the median forecast of analysts in Bloomberg surveys.

UK government bonds lost 4.3 percent last year, according to Bloomberg World Bond Indexes.

German securities fell 2.1 percent and US Treasuries declined 3.4 percent. - Bloomberg News


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