The pound advanced for a second week versus the dollar after the U.K. jobless rate unexpectedly fell below 7 percent, the threshold the Bank of England has set to start considering raising interest rates.
The pound rose to the highest level in more than four years against the dollar as Federal Reserve Chair Janet Yellen signaled the U.S. central bank will keep an accommodative monetary policy that has weakened the greenback.
The pound approached a four-year high against the dollar after the U.K. unemployment rate fell more in the three months through February than analysts forecast, adding to signs the economy is gaining traction.
The euro area’s higher-yielding government bonds are emerging as a haven from emerging-market turmoil as the prospect of greater stimulus from the European Central Bank underpins demand for the securities.
Sweden’s krona declined to the weakest level in almost two years against the euro amid speculation the nation’s central bank will cut interest rates at least once this year, damping demand for the currency.
U.K. government bonds rose, with 10-year yields approaching the lowest level since October, as tension in the eastern Donetsk region of Ukraine escalated, boosting demand for the safest fixed-income securities.
Italy’s government bonds rose, pushing 10-year yields to a record low, amid speculation demand from local investors at a sale of inflation-linked debt will be reinforced by overseas funds as the economy improves.