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EUR/GBP at Eight Month Low at 0.8350 after U.K. House Prices Increase

The pound strengthened for a fourth day against the euro after an industry report showed U.K. house prices rose the most in six years this month, adding to evidence the economic growth is gathering momentum.

Britain’s currency climbed to a nine-month high versus the dollar after Bank of England Governor Mark Carney said last week he sees no case for further stimulus that tends to debase a currency. U.K. gilts rose for a sixth day as speculation the Italian coalition headed by Prime Minister Enrico Letta is nearing collapse and concern the U.S. government is heading for a partial shutdown spurred demand for safer assets.

“U.K. data have been better than expected, which makes it more unlikely that the BOE will add to their stimulus,” said Lutz Karpowitz, a senior currency strategist at Commerzbank AG in Frankfurt. “The pound is benefiting against the euro from the Italian government troubles.”

Bloomberg [1]

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