Sun, Jul 10, 2005 - Page 10 News List

Dollar mixed as sterling remains under pressure

AFP , NEW YORK

The US dollar was mixed on Friday as sterling remained under pressure after weaker-than-expected US jobs growth data and speculation about an emergency rate by the Bank of England cut after the London bombings.

The euro managed to rise to US$1.1970 at 9pm GMT, from US$1.1953 late on Thursday.

The US dollar meanwhile climbed to ¥112.23 from ¥111.99.

In late New York trade, the dollar stood at 1.2991 Swiss francs from SF1.2979 Thursday.

Sterling hit a low point of US$1.7363, then rebounded to US$1.7379 compared with US$1.7431 on Thursday.

A spokeswoman for the Bank of England immediately denied the speculation about an emergency move to cut rates.

"There are no such plans at all at this point, it's absolutely rubbish," she said.

"We are aware of that rumor but unfortunately rumors are the bane of our lives and they happen," she said.

Bank of England policymakers held the cost of borrowing at 4.75 percent for the 11th month running at its official monthly rate-setting meeting, which happened to take place on Thursday.

The heavy toll could weigh on sentiment measures and force the Bank of England to more seriously consider an interest-rate cut, a step that a few members already have been leaning toward, some currency traders speculated.

The president of the European Central Bank, Jean-Claude Trichet, said later that the ECB and the Bank of England stood by to reassure financial markets but that no action was needed.

Sterling had fallen along with the dollar on Thursday as traders responded to deadly blasts in London by moving toward "safe haven" currencies such as the Swiss franc.

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