The pound rose for the first time in four days versus the euro as inflation slowed to the Bank of England’s target for the first time in more than four years, boosting optimism the U.K.’s economic recovery will strengthen.
The pound rose the most in almost two weeks against the dollar amid speculation that the Bank of England will refrain from increasing its monetary stimulus at the end of a two-day policy meeting tomorrow.
U.K. government bonds fell, with 10- year gilts dropping for an eighth day, as a government report showed inflation stayed at the fastest since May, weakening the case for more central bank asset purchases.
Oil rebounded from a two-week low after a report showing improved investor confidence in Germany and a debt sale in Spain that exceeded targets countered concern that European credit may be downgraded.
West Texas Intermediate fell for the second day in three after fluctuating amid data showing a slowdown in China’s manufacturing in July and shrinkage in crude stockpiles in the U.S., the world’s largest oil consumer.