(Bloomberg)--The pound advanced against the euro, heading for its first weekly gain in seven against the 16-nation single currency, after a report showed U.K. consumer confidence unexpectedly improved this month.
Sterling gained after research group GfK NOP Ltd. said its consumer confidence index increased one point to minus 19 in October. Economists predicted a drop to minus 22, according to the median of 20 forecasts in a Bloomberg News survey. Mortgage approvals probably fell for a fifth month in September, according to the median forecast of 17 economists in a separate survey. The Bank of England will publish the data at 9:30 a.m.
“Sterling does seem to be developing some positive momentum,” said Adam Cole, head of global currency strategy at RBC Capital Markets, in London. “It was helpful that consumer confidence was slightly firmer than expected.”
The pound strengthened 0.2 percent to 87.18 pence per euro as of 8:27 a.m. in London. It gained as much as 0.4 percent earlier today, trading at 87.06 pence. Sterling slipped 0.2 percent against the dollar, trading at $1.5907, from $1.5946 in New York yesterday.
Government bonds rose, with the 10-year gilt yield falling two basis points to 3.13 percent. The two-year yield also fell two basis points, to 0.69 percent.
To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net.