April 15 (Bloomberg) -- The British pound gained for the fourth week in five versus the euro as investors judged the U.K. economy will maintain a pace of expansion that's faster than that of the dozen nations sharing the euro.
British Pound Advances in Week Versus Euro on Growth Outlook
April 15 (Bloomberg) -- The British pound gained for the fourth week in five versus the euro as investors judged the U.K. economy will maintain a pace of expansion that's faster than that of the dozen nations sharing the euro.
Reports this week on Italian industrial production and German retail sales have added to signs growth in the euro region is slowing. Sales at U.K. retailers gained a second month this year in March, a release April 12 showed. Manufacturing and services industries also accelerated in March, polls of U.K. purchasing managers released on April 1 and April 5 indicated.
``It's looking good for the pound,'' said Ian Gunner, head of currency strategy at Mellon Financial Corp. in London. ``From a fundamental perspective the thing that has disappointed is the euro-zone data, it looks pretty horrible.''
Against the euro, the pound rose to 68.32 pence as of 4:20 p.m. in London from 68.68 April 8, and earlier rose as high as 68.03, its strongest since Sept. 29. The U.K. currency traded at $1.8829 from $1.8789 a week ago, gaining for a third week.
Earlier, the pound pared gains against the dollar after a report from the U.S. Treasury Department in Washington showed foreigners purchased a net $84.5 billion of U.S. assets in February, compared with $91.5 billion the month before. The median forecast of 14 economists polled by Bloomberg News predicted purchases of $65 billion.
Recent data ``point to ongoing economic growth at a moderate pace over the short term, with no clear signs as yet of a strengthening in underlying dynamics,'' the European Central Bank said in its monthly report yesterday.
`Increasingly Expensive'
Policy makers at the U.K. central bank kept the main interest rate at 4.75 percent for an eighth month on April 7, after lifting it from 3.5 percent in November 2003. The ECB has held its refinancing rate at 2 percent since June 2003.
``There are still people who think interest rates in the U.K. will have to go up, we think they will be disappointed by economic data,'' said Kristjan Kasikov, a London-based currency strategist at Calyon, the securities unit of Credit Agricole SA.
U.K. economic growth probably slowed in the first quarter of this year but is picking up according to the median forecast of 16 economists surveyed in a Bloomberg survey. Gross domestic product in Europe's second-largest expanded 0.6 percent in first quarter, after logging growth of 0.7 percent the previous three months. The government's statistics office will release the report April 22.
www.bloomberg.com
British Pound Advances in Week Versus Euro on Growth Outlook
April 15 (Bloomberg) -- The British pound gained for the fourth week in five versus the euro as investors judged the U.K. economy will maintain a pace of expansion that's faster than that of the dozen nations sharing the euro.
Reports this week on Italian industrial production and German retail sales have added to signs growth in the euro region is slowing. Sales at U.K. retailers gained a second month this year in March, a release April 12 showed. Manufacturing and services industries also accelerated in March, polls of U.K. purchasing managers released on April 1 and April 5 indicated.
``It's looking good for the pound,'' said Ian Gunner, head of currency strategy at Mellon Financial Corp. in London. ``From a fundamental perspective the thing that has disappointed is the euro-zone data, it looks pretty horrible.''
Against the euro, the pound rose to 68.32 pence as of 4:20 p.m. in London from 68.68 April 8, and earlier rose as high as 68.03, its strongest since Sept. 29. The U.K. currency traded at $1.8829 from $1.8789 a week ago, gaining for a third week.
Earlier, the pound pared gains against the dollar after a report from the U.S. Treasury Department in Washington showed foreigners purchased a net $84.5 billion of U.S. assets in February, compared with $91.5 billion the month before. The median forecast of 14 economists polled by Bloomberg News predicted purchases of $65 billion.
Recent data ``point to ongoing economic growth at a moderate pace over the short term, with no clear signs as yet of a strengthening in underlying dynamics,'' the European Central Bank said in its monthly report yesterday.
`Increasingly Expensive'
Policy makers at the U.K. central bank kept the main interest rate at 4.75 percent for an eighth month on April 7, after lifting it from 3.5 percent in November 2003. The ECB has held its refinancing rate at 2 percent since June 2003.
``There are still people who think interest rates in the U.K. will have to go up, we think they will be disappointed by economic data,'' said Kristjan Kasikov, a London-based currency strategist at Calyon, the securities unit of Credit Agricole SA.
U.K. economic growth probably slowed in the first quarter of this year but is picking up according to the median forecast of 16 economists surveyed in a Bloomberg survey. Gross domestic product in Europe's second-largest expanded 0.6 percent in first quarter, after logging growth of 0.7 percent the previous three months. The government's statistics office will release the report April 22.
www.bloomberg.com