The pound was about 0.4 percent from a 22-month high versus the euro amid bets a cooling housing market won’t be enough to prevent the Bank of England from being the first major central bank to increase interest rates.
Sterling was little changed versus the dollar after Rightmove Plc said house prices in England and Wales fell for the first time this year in July. The pound has been the best-performer in the past 12 months among a basket of 10 major currencies as a strengthening economy spurred bets central-bank officials led by Governor Mark Carney will increase borrowing costs in the first half of 2015. U.K. government bonds were little changed before a sale of 10-year debt tomorrow.
“Little has changed in terms of the structural direction and there should be further pound strength ahead,” said Neil Jones, head of hedge-fund sales at Mizuho Bank Ltd. in London. “There is some profit taking on long sterling positions, some of the housing data may be coming in a little bit on the lighter side given the previous performance. But there’s more to come, there’s an underlying bid to the pound.”
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