Sept. 9 (Bloomberg) -- The pound rallied against the euro, reversing declines.

The U.K. currency was at 80.11 pence per euro, from 80.37 yesterday, after slipping to 80.52. It fell to a record low of 81.88 pence on Sept. 4. The pound was at $1.7584, from $1.7581 yesterday, when it dropped below $1.75 for the first time since April 2006.

Government bonds rose, with the 10-year yield dropping 1 basis point to 4.47 percent. The price of the 5 percent security due March 2018 climbed 0.04, or 40 pence per 1,000-pound face amount, to 104.02.

The yield on the two-year note, which is more sensitive to interest-rate changes, slipped 1 basis point to 4.45 percent. Yields move inversely to bond prices.

To contact the reporters on this story: Lukanyo Mnyanda in London at lmnyanda@bloomberg.net

Last Updated: September 9, 2008 09:38 EDT