U.K. Currency Advances on Signs Housing Market is ‘Stabilizing’

By Matthew Brown and Gavin Finch

June 9 (Bloomberg) -- The pound rose against the dollar for the second day as signs the U.K. housing market is “stabilizing” stoked optimism the worst of the recession is over.

The U.K. currency also strengthened versus the euro on speculation Prime Minister Gordon Brown has fended off calls to step down following a series of ministerial resignations and a drubbing in local and European elections.

“The housing data and the improvement in Gordon Brown’s fortunes for the time being are providing support for the pound,” said Gavin Friend, a markets strategist in London at National Australia Bank. “There’s an appetite for risk out there today.”

The pound rose 0.6 percent to $1.6141 as of 7:55 a.m. in London, and advanced 0.4 percent against the euro to trade at 86.25 pence.

The number of respondents in a monthly survey saying home values fell exceeded those reporting gains by 44.1 percentage points, the best reading since November 2007, the Royal Institution of Chartered Surveyors said today. Property sales per agent rose to 11.8 in the three months through May, the highest since August 2008.

To contact the reporter on this story: Matthew Brown in London at mbrown42@bloomberg.net