Baqar HussainThe pound advanced for the first time in 10 days against the dollar, ending its longest losing streak since 2008, as optimism that stability may be returning to China’s market eased concern that the U.K. economic recovery will be derailed.
Sterling gained versus all of its 16 major counterparts as investors looked forward to the Bank of England’s monetary-policy decision later in the week. That’s when the focus will center on minutes of BOE discussions for clues on when rate increases may start. The pound advanced from an almost four-month low against the dollar, ending a slump that had coincided with speculators reversing bullish bets by the most in nearly a year.
Sterling slumped last week after reports from manufacturing to services signaled a slowdown, prompting money-market traders to pare back tightening expectations even after BOE Governor Mark Carney said Aug. 29 that market turmoil hadn’t pushed back theprospect for higher borrowing costs. Other reports this week will show rebounds in house prices and industrial production, according to the median estimate of economists in Bloomberg surveys.
The pound gained 0.6 percent to $1.5257 as of 10:32 a.m. London time, after a weekly drop of 1.4 percent that pushed it to its weakest level since May 7. It advanced 0.4 percent to 73.18 pence per euro, after sliding 0.8 percent on the previous trading day. Sterling gained the most versus the South Korean won.
Government bonds were little changed, with benchmark 10-year gilt yields at 1.84 percent. The price of the 2 percent bond due in September 2025 was at 101.47 percent of face value.
Syed Zaki Hussain
