“The pound rallied from near a 15- month low versus the euro amid speculation it has weakened too far on bets the next Bank of England governor Mark Carney will boost efforts to spur the economy when he takes over in July.
Britain’s currency strengthened against all 16 of its major counterparts before Carney testifies to U.K. lawmakers in London tomorrow. Economists predict the central bank will leave its benchmark interest rate at a record-low 0.5 percent and maintain its asset-purchase target at 375 billion pounds ($587 billion) when it meets the same day. Gilts rose after a report showed house prices declined in January.
“I am relatively optimistic on sterling at these levels,” said Geoff Kendrick, head of European currency strategy at Nomura International Plc in London. “Carney’s speech will be interesting tomorrow, there will be focus on what he’s going to do when he takes over. Sterling has overreacted to the idea that the BOE will take extreme measures and I think markets will pare back some of the bearishness.”
The pound gained 0.4 percent to 86.38 pence per euro at 12:19 p.m. London time. The U.K. currency depreciated to 87.17 pence on Feb. 1, the weakest since October 2011. Sterling was little changed at $1.5654 after dropping to $1.5631 yesterday, the lowest since Aug. 10….”
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