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Sun, Jan 04, 2009 - Page 10 News List

Pound slides against dollar for third week

BLOOMBERG AND AP , NEW YORK

The pound slid for a third week against the dollar, the longest run of declines since September, and two-year gilt yields tumbled to the lowest level on record as reports showed UK mortgage approvals fell and manufacturing shrank.

The pound was little changed versus the euro in the period after weakening to a record on Tuesday, and on Friday dropped to near a seven-year low against the US currency.

The Bank of England said lenders granted 27,000 loans to buy homes in November, down from a revised 31,000 a month before and below the estimate in a Bloomberg survey.

Manufacturing contracted for an eighth month last month as the economic slump deepened, a separate report showed.

“You will continue to see downward pressure on the pound,” said Neil Mellor, a currency strategist in London at Bank of New York Mellon Corp. “The market is going to take some convincing that the BOE will not slash rates further.”

The pound declined to US$1.4466 late on Friday in London, from US$1.4678 a day earlier, leaving it down 0.5 percent in the week. It slid to US$1.4354 on Wednesday, the weakest level since April 2002.

Against the euro, sterling depreciated to £0.9612, from £0.9562. The pound traded at an all-time low of £0.9803 on Tuesday.

The dollar began the year by gaining against most of the other major currencies as a spate of negative reports out of Europe counteracted decades-low US manufacturing data.

The euro slipped to US$1.3854 in late New York trading on Friday from US$1.3954 late on Wednesday in New York. US markets were closed on Thursday for a public holiday.

Slovakia on Thursday became the 16th country to adopt the common European currency.

In other New York trading, the dollar jumped up to ¥92.17 from ¥90.90 in New York on Wednesday, and rose to 1.0793 Swiss francs from SF1.0721. The dollar was barely changed in trading against the Canadian dollar, slipping to C$1.2141 from C$1.2142.

South Korea’s won and India’s rupee led losses in Asian currencies this week on concern a deepening global recession will hurt the region’s exports.

The won, Asia’s worst performer last year, slumped the most in two months on Friday after a report showed overseas sales fell last month and South Korean Finance Minister Kang Man-soo forecast no economic growth for the first half of this year.

The Indian rupee touched a one-week low after the government reported a slide in exports. The Reserve Bank of India on Friday slashed the benchmark interest rate for the fourth time in less than three months to counter the slowdown.

The won reversed the week’s earlier gains and ended 1.7 percent lower this week at 1,321 per dollar, after dropping almost 5 percent on Friday, according to Seoul Money Brokerage Services Ltd. The currency slumped 26 percent last year, the worst performance among the 10 most-traded regional currencies outside Japan.

The Singapore dollar weakened 0.5 percent this week to S$1.4532. The currency slipped 0.5 percent in 2008, its first loss in three years.

The Indian rupee slid 0.6 percent to 48.755 per dollar. It tumbled 19.2 percent last year, the biggest annual slide since 1991.

Elsewhere, the New Taiwan dollar rose 0.5 percent in the week to NT$32.86 against the US dollar. Indonesia’s rupiah declined 0.3 percent to 11,130 a dollar and Vietnam’s dong dropped 0.3 percent to 17,483. China’s yuan ended 0.3 percent stronger at 6.8230 on Wednesday and Malaysia’s ringgit rose 0.4 percent to 3.4662.

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