Sterling fell broadly this morning, hitting its lowest in nearly two months against the dollar due to fears about UK fiscal health ahead of finance minister Alistair Darling's pre-budget report. The euro has also hit a low against the dollar, prompted by rising debt worries for Greece and Dubai.
Pound Sterling – UK Markets
Worries about Britain's fiscal health continue to pressure sterling, which slid to an eight-week low against the dollar. The pound was down 0.3% at USD1.623, after hitting the USD1.616 mark earlier in the morning.
Alistair Darling is expected to raise his forecast for government borrowing from a record GBP175 billion this year as he admits that the recession has turned out to be deeper than he forecast in April.
US Dollar – US Markets
The dollar has gained as a result of the worries surrounding a global recovery, trading at 0.617 against the pound and 0.680 versus the euro.
The dollar index hit a fresh one-month high of 76.33 in early Asian trade before slipping back to 76.16, down 0.2%.
Euro – European Markets
The euro rose half a percent to 90.69 pence against sterling but fell against the dollar. The single currency was as low as USD1.466, its lowest since early November, but later gained to USD1.472.
Currency markets may continue to reflect a shift away from risky assets as Switzerland’s unemployment rate hits a six-year high while German trade balance figures revealed uninspiring imports growth figures.
Other Currencies – Highlights
The final revision of Japan’s third-quarter GDP figures showed the economy expanded at a slower pace than originally reported, however the yen could advance to as far as 87.80 yen per dollar.
Australia’s consumer confidence has slipped on higher interest rates to leave the Aussie trading 0.558 against the pound.
The US Dollar Struggles to Find Demand on President's Day
Pound Sterling Rebounds on Upbeat Sales Data
Pound Sterling Extends Slide as PM May Suffers Another Defeat