US ($) Currency Thread 1 (closed - use thread 2)

inspector_monkfish

15:05 02Mar09 Bank worries see Stg hit 1-mth low vs dlr; BoE eyed

* Pound hits 1-mth low vs stronger dlr on banking concerns
* Market cautious ahead of BoE rate decision
* Data reflects gloomy economic outlook


LONDON, March 2 (Reuters) - Sterling fell to its lowest level in just over a month against the dollar on Monday after another bailout for troubled U.S. insurer AIG accelerated a flight into perceived safer assets.

The dollar also rose against other major currencies, reflecting concerns over the financial sector that saw the S&P 500 extend losses from a 12-year closing low on Friday and the FTSE 100 share index <.FTSE> fall over 3.0 percent on Monday.

HSBC <HSBA.L> led the losers down in the UK after unveiling a 12.5 billion pound ($17.7 billion) rights issue as annual profits fell and bad debts soared in the United States.
Investors were also focused on this week's Bank of England interest rate decision, with borrowing costs seen hitting a fresh record low.

"Sterling is suffering somewhat having broken through some key technical levels and the dollar continues to outperform the pound in particular," said Rabobank strategist Jeremy Stretch.

"There are a number of questions about the UK backdrop and the BoE on the horizon so there's plenty of reasons at least for the next few days to stand aside from sterling."

Sterling fell as far as $1.4029 and was last 1.70 percent down at $1.4064 <GBP=>, while the euro was up 1.16 percent at 89.57 pence <EURGBP=> by 1453 GMT.

The dollar hit a three-year high against a basket of currencies <.DXY> after U.S. insurer AIG <AIG.N> posted the biggest quarterly loss in U.S. corporate history and heard it would get another multi-billion-dollar U.S. taxpayer handout just days after a further bailout for Citigroup <C.N> rattled markets.

UK data meanwhile, continued to paint a gloomy picture with manufacturers slashing jobs and output at a record pace in February as export orders fell [ID:nLAG003259].

"The UK manufacturing sector remains deeply in recession and that's likely to remain the case despite the competitiveness of sterling," said Philip Shaw, chief economist at Investec.

Housing sector news made grim reading too with British mortgage lending rising by much less than expected in January [nBOE001765], while property data company Hometrack said house prices in England and Wales fell by 0.8 percent in February to stand 10.0 percent lower than a year ago [ID:nLR70894].

In the short-term, the pound remains vulnerable as the BoE finalises its plan to take unconventional steps to boost the money supply, so called quantitative easing.

Bank Governor Mervyn King said last week that money supply was not growing quickly enough, and that was why the central bank was seeking permission to conduct asset purchases.

The BoE is expected to cut key interest rates by half a percentage point to an all-time low of 0.5 percent when it meets on Thursday [BOE/WATCH] and euro zone, Australian and Canadian interest rate decisions are also due this week.

"The Bank of England is expected to vote on commencing quantitative easing this week. This is expected by markets but the details and execution of the plans will be of greater concern," UBS strategist Brian Kim said in a note.

"Sterling will remain under pressure against the dollar under current conditions but we continue to expect euro/sterling downside."

inspector_monkfish

neilbond007 wrote: »

tell me about it. i fixed mine in august last year. 3% penalty for 2 years.
thought i was getting a good deal with 5 1/2% (I think it is)....

then i get the chance to go to the US.
dollar heads south... house prices head south...

oh, happy days!

u shudda come see me last august....

neilbond007

inspector_monkfish wrote: »

u shudda come see me last august....

oh well, it's only money!!

we look to be sinking below 1.40

inspector_monkfish

yep, Dow just hit a new low

KayJ066

jonathanrichardson69 wrote: »

i don't go until the 4th may, married on the first, then 3 weeks in california. hopefully it will change by then. where did you get yours from Kay?

Thomas Cook, on the high street. Pre-ordered them the day before and picked them up saturday!

jonathanrichardson69

it doesn't look like it will get any better today :mad:

jonathanrichardson69

KayJ066 wrote: »

Thomas Cook, on the high street. Pre-ordered them the day before and picked them up saturday!

thanks, i'll give that a go then nearer the time, fingers crossed it will get better its got to get better before may, thats over 8 weeks away

inspector_monkfish

jonathanrichardson69 wrote: »

it doesn't look like it will get any better today :mad:

not whilst the Dow continues to plummet to new lows
currently down 2.5% or 180pts to 6880


afraid its the old 'flight to quality' sketch again....

jonathanrichardson69

i thought if the Dow was down, the GBP usually went up, the FTSE is also down quite drastically again

inspector_monkfish

jonathanrichardson69 wrote: »

i thought if the Dow was down, the GBP usually went up, the FTSE is also down quite drastically again

we got a whole new set of rules we play by now!!
when stocks sell off, people are buying currency, and the currency of choice at the moment is USD - as its seen as a safe haven in times of trouble:mad: