The pound jumped more than 1 percent against the euro, the biggest gain in six months, after euro- area inflation slowed and the jobless rate climbed to a record, boosting demand for alternatives to Europe’s shared currency.
The pound rose above $1.62 to the highest level in almost nine months after reports showed house prices climbed the most in six years and mortgage approvals increased, adding to signs the economy is gaining momentum.
German companies are more bullish on the euro’s prospects over the next three months than at any time since February, showing confidence in the ability of the European Central Bank’s interest-rate cuts to spur the economy.
The euro strengthened from a four- month low against the dollar as Cyprus sought alternatives to the European Union plan to help the nation avoid a banking collapse and the Federal Reserve maintained stimulus measures.
The forint strengthened against the euro, paring last week’s losses on speculation Hungary will resume talks with the International Monetary Fund while European stress tests added to optimism about the global recovery.