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U.K. Pound Drops Before Mortgage Data; Gilts Advance on Demand for Safety
By Lukanyo Mnyanda - Aug 31, 2010 1:00 AM MT
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The pound declined against the dollar before a report economists say will show U.K. lenders approved fewer mortgages last month, adding to evidence the economic recovery will falter.
Sterling declined against 15 of its 16 most-actively traded peers. U.K. banks approved 46,500 mortgages in July, from 47,643 in June, the Bank of England will say today in London, according to a Bloomberg survey. U.K. gilts gained as declines in stock markets boosted demand for the relative safety of fixed-income assets. The FTSE 100 Index slid 1.1 percent.
“The outlook for the U.K. economy and sterling is weakening,” said Hans-Guenter Redeker, head of foreign-exchange strategy at BNP Paribas SA. “The housing market is turning around. That’s going to have a further negative impact on sterling.”"
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