EUR/GBP falls to 0.84 as U.K. Services Output Expands

The pound advanced, climbing to the strongest in a month against the euro, after an industry report showed U.K. services output expanded at the fastest pace in 16 years in October.

Sterling gained the most in two weeks versus the dollar after an independent economic institute raised its forecasts for Britain’s economic growth, saying a pickup in house prices will stoke consumer spending. Short-sterling futures contracts fell, a sign that traders are adding to bets for higher borrowing costs. U.K. government bonds fell as demand for safer assets waned. The Debt Management Office sold 1.25 billion pounds ($2.01 billion) of inflation-linked securities.

“This underlines the resilience of the U.K. economy,” said Jeremy Stretch, head of currency strategy at Canadian Imperial Bank of Commerce in London, referring to the services data. “This is supportive for sterling. It makes sense to sell the euro against the pound.”

Bloomberg

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