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Pound Rises Against Euro as Recovery Optimism Gathers Momentum

April 24 (Bloomberg) — The pound rose against the euro for the fifth week in six as data indicated the recovery from Britain’s worst recession on record is gathering momentum and the Bank of England may move to withdraw stimulus measures.

The pound also advanced against the Japanese yen as reports showed mortgage approvals rose more than economists predicted and jobless claims declined. The weekly gains were trimmed after data yesterday showed the economy grew at a slower pace than forecast and concern lingered that next month’s election won’t result in a majority government.

“The pound performed well this week, and that’s partly a reflection of economic data that tended to surprise on the upside,” said Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “Economic reports fueled speculation that the Bank of England may have to act soon. Despite the gain, we think the pound remains vulnerable because of political uncertainty.”

The pound climbed 1 percent against the euro over the week to 86.97 as of 5 p.m. yesterday in London. It rose 2.2 percent against the yen to 144.7 yen from 141.6 on April 16. The currency was little changed against the dollar at $1.5366.

The number of Britons claiming jobless benefits fell 32,900 from February to 1.54 million, the Office for National Statistics said on April 21. Loans for house purchases granted by lenders increased to 52,000 last month, from a nine-month low of 48,000 in February, according to the Bank of England’s report on April 22.

via Pound Rises Against Euro as Recovery Optimism Gathers Momentum – BusinessWeek.

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