By Bo Nielsen Jan. 13 (Bloomberg) -- The pound rose for a fourth day against the dollar, its longest run of gains since November, after Bank of England policy maker Andrew Sentance was cited as saying interest rates may have to increase this year. The British currency also climbed versus the euro and the yen after the Guardian newspaper reported Sentance as saying the bank has done enough to stimulate the economy. The yen fell against all 16 of its most-traded peers tracked by Bloomberg before fourth-quarter earnings reports this week from companies including Intel Corp. and JPMorgan Chase & Co., which some analysts say will bolster stocks. The dollar slid against the euro for a third time in four days. “The comments from Sentance gave a sniff of a turn in the U.K. rate cycle, and that lifted the pound,” said Adam Cole, the London-based global head of currency strategy at Royal Bank of Canada. “It’s a bit premature in our view, but the comments moved the markets.” The pound climbed to $1.6275 as of 7 a.m. in New York, from $1.6164 yesterday, for its longest sequence of gains since the five days through Nov. 9. It strengthened to 89.37 pence per euro, from 89.63 pence, and appreciated to 148.57 yen, from 147.06. The dollar weakened 0.4 percent to $1.4544 per euro and rose 0.4 percent to 91.30 yen. The yen fell 0.8 percent to 132.80 per euro. ‘Wait and See’ The Bank of England may adopt a “wait-and-see” approach to review the effectiveness of its quantitative-easing program, Sentance said, according to the Guardian. Policy makers have to consider raising rates as “there are global influences such as oil and commodity prices and the impact of the exchange rate, which can lead to speed limits for the rate of growth,” the newspaper quoted him as saying. The yen declined as stocks rose. Analysts estimate that fourth-quarter earnings reports beginning this week will show S&P 500 profit rose 62 percent, according to data compiled by Bloomberg. The Dow Jones Stoxx 600 Index of European equities gained 0.1 percent today, as did Standard & Poor’s 500 Index futures. “I still wouldn’t bet on an earnings disappointment,” said David Deddouche, a currency strategist at Societe Generale SA in Paris. “The yen is clearly now the funding choice for the carry trades. As long as we stay in the sweet spot for equities, the yen has weakening bias.” In yen carry trades, investors borrow the currency at Japan’s 0.1 benchmark rate to buy higher-yielding assets in other currencies. The yen advanced the most in a month against the dollar yesterday as stock markets declined and the People’s Bank of China raised reserve requirements for the nation’s lenders, reducing cash available to fuel the rally in risky assets. Buy Pound-Aussie Investors should buy sterling against the Australian dollar targeting a gain to 1.92 per pound, Stephen Hull, a currency strategist at Morgan Stanley in London, wrote in a note today. The pound traded at 1.7556 Australian dollar, from 1.7570 yesterday. “Our theme for global currencies in 2010 is for there to be a reversal of the ‘punish the printer’ theme, as the major central banks drain liquidity and start to raise interest rates,” Hull wrote. “Although Australia’s economic performance has been much better than that of the U.K. through the crisis, this is already priced into the currency market.” Traders pared bets that the Bank of England will hold its key rate at a record low of 0.5 percent, with the implied yield on the June short-sterling futures contract rising 2 basis points today to 0.84 percent. Australia, Greece Australia’s dollar gained versus all of the 16 most-traded currencies on speculation a report tomorrow will show payrolls increased for a fourth month in December. Employers added 10,000 jobs last month, according to the median estimate of economists in a Bloomberg News survey. The Australian dollar gained 0.6 percent to 92.57 U.S. cents from 92 cents yesterday. On Jan. 11, the Aussie touched 93.26 U.S. cents, the highest level since Nov. 18. The euro strengthened after Greek Finance Minister George Papaconstantinou said the nation is on the right track to solve its problems and does not need bailing out. The European Union is helping Greece identify problems, Papaconstantinou said, according to Germany’s Handelsblatt newspaper.

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