The pound fell for a second day against the dollar, reaching the lowest level in six weeks, as investors judged the rally that helped push the U.K. currency to a 4 1/2-year high was overdone.
Sterling slid for a fourth day versus the euro, the longest losing streak since March. U.K. bonds rose, pushing the 10-year yield down the most in two weeks, as government debt securities across Europe advanced. The Debt Management Office sold 1.1 billion pounds ($1.84 billion) of index-linked gilts due in 2052 today. The pound is the best performing major currency in the past year as investors bet the Bank of England will hasten plans to increase interest rates.
“Although sterling has its attractions, you get the sense that enthusiasm has waned,” said Neil Mellor, a London-based currency strategist at Bank of New York Mellon. “Whether there’s enough out there to take on the $1.70 level, I have my doubts at the moment because the question of interest rates is just a little more uncertain than it was. The market’s looking to lock in profit at the moment and it may need another catalyst.”
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