By Andrew MacAskill Nov. 14 (Bloomberg) -- The pound rebounded from a record low against the euro, trimming a weekly loss, on speculation the currency is oversold. The pound reached an all-time low yesterday against the euro and traded below $1.50 today for a third day. The Bank of England indicated on Nov. 12 it will keep cutting interest rates as the economy slumps. Technical indicators showed losses by the pound, which lost 5 percent versus the euro this week, were excessive. ``We have moved a long way very quickly and that means we may have been due for a bit of a pullback,'' said Jeremy Stretch, senior strategist in London at Rabobank International. ``Longer term, though, I would very hesitant about expecting sterling's recovery.'' The pound advanced to 85.43 pence per euro as of 9:13 a.m. in London, from 86.06 pence yesterday, when it fell to a record 86.63 pence, the lowest since the common currency's debut in 1999. Against the dollar, the pound traded at $1.4846, from $1.5643 a week ago, the steepest slide since the period ended Oct. 24. Technical factors suggest the U.K.'s currency is due for a rebound. The pound's 14-day relative-strength index versus the euro, a technical indicator some traders use to forecast changes in price direction, was at 26.08 today, below the 30 threshold that signals a rebound. The previous time the pound was below 30, on Sept. 3, the U.K. currency rose the next eight days. Gross domestic product will contract by an annual 1.8 percent in the first three months of the year, according to forecasts from the central bank released on Nov. 12. ``We are certainly prepared to cut the bank rate if that proves to be necessary,'' Bank of England Governor Mervyn King said that day. U.K. policy maker Andrew Sentance said yesterday the pound's slide against the dollar and the euro will make it easier for manufacturers to cope with a recession. The yield on the U.K. two-year note, more sensitive to interest rates, rose 4 basis points to 2.30 percent. The 4.75 percent security due June 2010 declined 0.09, or 90 pence, per 1,000-pound ($1,484) to 103.71. The yield on the German two-year note rose above that of the comparable gilt for the first time since December 1993. The yield on the benchmark German note was at 2.30 percent today. The yield on the U.K. 10-year gilt climbed 3 basis points to 4.14 percent. Yields move inversely to bond prices. To contact the reporter on this story: Andrew MacAskill in London at amacaskill@bloomberg.net

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