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EUR/GBP Below 0.78 After Economic Growth Revised

The pound rose versus the euro and headed for a sixth monthly advance after economic-growth data were revised higher. That stoked speculation the Bank of England will tighten policy as its European counterpart adds stimulus.

Sterling dropped against the dollar after a report showed Britain’s current-account deficit deteriorated in the three months through June. The U.K. economy grew faster than estimated in the second quarter, extending a recovery from a recession that was not as severe as previously thought. A separate report showed euro-area inflation slowed in September. U.K. government bonds fell before a sale of bonds due in 2027.

“Sterling is supported by solid data, expectations of a rate increase, and market positioning that makes the currency less vulnerable to bad news,” said Jane Foley, senior foreign-exchange strategist at Rabobank International in London. “Revisions by the Office for National Statistics suggested the recession we had was not as bad as we initially thought. That’s positive for the pound, especially against the euro.”

Bloomberg [1]

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