LONDON: The pound gained slightly on Friday after a report showed U.K. house prices rose more than expected, adding to optimism on the UK economy and making it more likely the Bank of England will tighten monetary policy sooner than predicted.
British house prices jumped 1.1 percent in November from October, according to the mortgage lender Halifax. Economists polled by Reuters had forecast a gain of 0.6 percent.
The euro was down 0.1 percent against the pound at 83.565 pence. Sterling was up 0.1 percent at $1.6349.
Moves were limited before the US non-farm payrolls report due later on Friday. The US economy grew faster than initially estimated in the third quarter, encouraging bets that payrolls and unemployment will also beat forecasts.
That would bolster expectations the Federal Reserve will soon begin to taper its policy of printing money.
"If the market comes around to the idea of tapering in December the pound has most potential to fall," said Derek Halpenny, European Head of Global Market Research.
However, he said that it was unlikely that the non-farm payrolls number would exceed forecasts that much. A Reuters survey of economists predicted non-farm payrolls, due at 1330 GMT, have increased by 180,000.
"I think we'd need a number around 220,000-230,000 to make it move, and if we get around consensus it won't trigger a move," Halpenny said.
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