British Pound Advances for First Day in Three Versus Dollar

The pound rose against the dollar for the first day in three as a poorly received U.S. treasury auction yesterday damped demand for the U.S. currency.

The British currency rebounded after nearing its lowest level in almost four months against the dollar yesterday. It was little changed against the euro. Treasuries fell yesterday after the $35 billion five-year sale. Bids totaled 2.61 times the available amount, the least since June.

“The main thing in the last 24 hours is the bad U.S. auction yesterday, so the dollar is mildly softer,” said Geoff Kendrick, head of European foreign-exchange strategy at Nomura Holdings in London. Kendrick and others, including Neil Mellor, a currency strategist in London at Bank of New York Mellon Corp., said there’s thin trading on markets this week and all moves should be viewed in that context.

The pound rose against the dollar, climbing 0.4 percent to $1.5436 as of 2:52 p.m. in London. That was its first advance in three days, after it fell to $1.5345 yesterday, its weakest level since Sept. 7.

Against the euro the British currency strengthened 0.4 percent to 85.05 pence.

The pound has fallen 3.0 percent in the past month and 6.9 percent this year, according to Bloomberg Correlation-Weighted Currency Indexes. The dollar has dropped 1.9 percent this year, while the euro has lost 10.9 percent, the indexes show.

To contact the reporters on this story: Paul Dobson in London at pdobson2@bloomberg.net; Emma Charlton in London at echarlton1@bloomberg.net

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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