Pound Rises Through $1.64 on House-Price, Manufacturing Reports

[Enivid]

The pound rose, surpassing $1.64 for the first time in seven months, and gilts declined as reports on manufacturing and house prices added to evidence Europe’s second-biggest economy is recovering from a recession.

The British currency also advanced versus the euro and the yen as the FTSE 100 Index surged to a five-month high. An index of U.K. manufacturing climbed to its strongest level in a year last month and house prices snapped 20 months of declines, data showed today. The pound will reach $1.72 in the next three months, Calyon said, following its biggest monthly gain in almost a quarter of a century.

“The pound advanced on further risk appetite and improvement in the conditions of the manufacturing sector,” Sagiv Perez, chief analyst at Finotec Trading U.K. Ltd., a London-based derivatives and foreign-exchange broker, wrote in a note to clients today.

The pound climbed as high as $1.6431, the strongest level since Oct. 31, and was at $1.6375 as of 1:11 p.m. in London, from $1.6189 at the end of last week. The British currency strengthened to 86.80 pence per euro, from 87.47 pence.

A gauge based on a survey of U.K. factories rose to 45.4 in May from 43.1, the Chartered Institute of Purchasing and Supply and Markit Economics said today. The median of 25 forecasts in a Bloomberg News survey was for a reading of 44. Average house prices in England and Wales were little changed after falling 0.3 percent in April, property researcher Hometrack Ltd. said.

From Bloomberg News.