(Bloomberg) -- The pound rose for the first time in three days versus the euro as U.K. growth figures beat economists' forecasts and Europe's single currency was hurt by the mounting furore over Deutsche Bank AG.
Sterling climbed against most of its Group-of-10 peers, and posted its first weekly gain versus the euro in a month, after data showed increased consumer spending and business investment helped offset the economic effects of a growing trade deficit.
Still, the gains may be short-lived as traders' attention now turns to purchasing managers' surveys for manufacturing, construction and services next week, which analysts see showing a slowdown in September.
The growth figures came in “a touch better than anticipated,” said Sam Lynton-Brown, a foreign-exchange strategist at BNP Paribas SA in London. “The PMIs next week are going to be more important for the currency because they're going to be more important for the likelihood of further Bank of England easing.”
The pound climbed 0.2 percent to 86.34 pence per euro as of 4:30 p.m London time, leaving it 0.3 percent stronger in the week. Europe's 19-nation currency was undermined by fading confidence in Deutsche Bank's finances. Sterling rose 0.4 percent to $1.3013.
80s Redux
The U.K. currency still posted a fifth straight quarterly decline versus the greenback -- the longest losing streak since the mid-1980s -- after touching a three-decade low in the wake of the June 23 vote to leave the European Union.
Futures markets price a 22 percent chance of a cut to the BOE's main rate by year-end, which -- if it happens -- would likely undermine the pound further. Still, there was more economic good news with today's consumer-confidence data, which bounced back to levels seen before the referendum.
A stronger outlook would give the central bank less reason to ease policy further after it lowered borrowing costs to a record on Aug. 4 to stave off the effects of Brexit.
To contact the reporter on this story: Charlotte Ryan in London at cryan147@bloomberg.net. To contact the editors responsible for this story: David Goodman at dgoodman28@bloomberg.net, Paul Armstrong, Keith Jenkins
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