The pound resumed gains versus the euro amid speculation the European Central Bank will announce a plan to buy the region’s government bonds this week, a policy measure that may debase the 19-nation shared currency.
The pound fell the most in a week and approached a 12-month low versus the dollar as the Bank of England held interest rates at a record low amid signs Britain’s economic recovery is ebbing.
The pound rose versus the dollar, extending a gain from the end of last week, as a gauge of retail sales exceeded analysts’ forecasts and trading patterns suggested the U.K. currency was due to halt its downward trend.
The pound fell a third day versus the dollar as data showing U.K. consumer confidence dropped in July and house prices grew at the slowest pace since April 2013 damped demand for Britain’s currency.
The euro and pound will weaken to more than three-year lows against the dollar by year-end as the central banks of the euro area and U.K. extend easy monetary policies that tend to debase currencies, according to UBS AG.
