Pound Climbs to Five-Week High Versus Euro on Cyprus; Gilts Gain
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The pound strengthened to a five-week high against the euro after the imposition of a levy on bank deposits in Cyprus threatened to throw Europe back into crisis, fueling demand for U.K. assets as a haven.
Sterling rose versus all but three of its 16 major counterparts as a vote on the tax championed by Cypriot President Nicos Anastasiades to help secure rescue loans for the indebted Mediterranean nation was delayed for a second day. U.K. government bonds gained, pushing down 10-year yields to the lowest this year. The pound has still weakened 5.5 percent versus the euro this year as British policy makers consider further stimulus to boost the economy.