Ongoing concerns over the state of the subprime mortgage lending market in the United States have seen the dollar fall against both the euro and the yen.

This morning the dollar stood at $1.3158 to the euro and a dollar bought
117.295 Japanese yen.

The fall in the value of the dollar also had a knock-on effect on the pound as traders exited carry trades on concerns over the health of the US economy.

US mortgage lender New Century Financial said it had lost financing and would need $8.4 billion if it needs to repurchase all outstanding subprime mortgage loans.

The New York Stock Exchange halted trading of New Century yesterday while it decides whether to keep listing its securities.

"It is a very distressing picture at this point," Karen Shaw Petrou, managing partner of Federal Financial Analytics, told a hearing of a House Financial Services panel looking at the mortgage market.

"People forgot that subprime means higher risk, higher risk means more losses."

According to the Seatle Times $1.3 trillion in subprime mortgages is currently outstanding - a figure nearly as large as the entire Californian economy.