Dec. 14 (Bloomberg) -- The pound traded near the highest level in three weeks against the dollar before a report that will show U.K. inflation remained above the government's 3 percent limit last month. Consumer prices rose 3.2 percent from a year earlier in November, according to the median forecast of 33 economists in a Bloomberg News survey. Sterling advanced above $1.59 for the first time since Nov. 23. A U.K. housing-market gauge stayed close to the lowest in 18 months in November, the Royal Institution of Chartered Surveyors said. The number of real- estate agents and surveyors saying prices fell exceeded those reporting gains by 44 percentage points, compared with minus 49 points in October. "Focus will be on the CPI data," analysts at Credit Agricole Corporate & Investment Bank including Simon Smollett in London, wrote in an e-mailed report today. "Inflation expectations are moving higher, eroding the case for sterling bearishness." The pound rose against the dollar, advancing 0.1 percent to $1.5872 as of 8:50 a.m. in London. It reached $1.5911 earlier. Sterling depreciated 0.4 percent to 84.76 pence per euro. "There's been an element of profit-taking into the year- end as investors sell their dollars," Smollett said in a telephone interview. Sterling has lost 0.3 percent in the past week, according to Bloomberg Correlation-Weighted Currency Indexes, which track a basket of 10 developed-country currencies. Since the end of 2009, Britain's currency has lost 4.3 percent, compared with an 8.9 percent decline by the euro and a 2.3 percent loss by the dollar. U.K. government bonds rose, with the 10-year gilt yield dropping one basis point to 3.54 percent. The two-year yield fell by two basis points to 1.14 percent. Gilts returned 5.6 percent this year, according to indexes compiled by the European Federation of Financial Analysts Societies and Bloomberg. Treasuries gained 5.9 percent and German debt, the euro-area's benchmark securities, returned 5.8 percent, the EFFAS indexes show.

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