London - The pound rose for a second day versus the dollar before data that economists said would show retail sales in the UK increased last month.
Sterling extended an advance from Wednesday when Bank of England policy maker David Miles said that it is “more likely than not” that the next move in interest rates will be an increase and there was no sign of persistent underlying deflation pressure. UK 10-year government bonds were little changed.
The pound advanced 0.6 percent to $1.4963 at 9.26am London time, headed for the biggest increase since March 20 on a closing basis. Sterling was little changed at 73.76 pence per euro, holding a four-day decline.
UK retail sales including auto fuel rose 0.4 percent in February, following a 0.3 percent decline the previous month, according to the median forecast of economists in a Bloomberg survey.
“It’s wise to hold your nerve and not to get panicked into a response” to the current rate of inflation, Miles said in an interview with the Financial Times published Wednesday.
The 10-year gilt yield was little changed at 1.49 percent. The price of the 5 percent bond due in March 2025 fell 0.11, or 1.10 pounds per 1,000-pound face amount, to 132.335.
Bloomberg