The pound was 0.3% from the highest level in more than five years against the dollar as data showed speculators increased their bets on its appreciation to the most since 2007.
Today’s data added fuel to a resurgence in the pound’s world-beating rally that was given impetus yesterday when inflation exceeded economist estimates.
The yen fell the most in a week against the dollar after a report showed Japan’s economy slowed more than analysts forecast, fueling speculation the central bank will need to boost measures to spur growth.
Sterling appreciated to a six-week high vs. the euro as the UK jobless rate dropped below the 7% threshold that Bank of England Governor Mark Carney has set as an initial guide for considering increasing interest rates.
The euro weakened for a second day against the dollar after European Central Bank President Mario Draghi said policy makers had a “wide discussion” on interest rates before they took a policy decision today.
Italian government bonds rose, reversing an earlier decline, as concern that Prime Minister Mario Monti’s resignation would derail the nation’s attempts to cut its debt load eased.
