Jumat, 12 Desember 2008

Pound in another record euro low

It is at the lowest level since the euro was launched in 1999.
The pound gained one cent against the US dollar, reaching $1.4967, as against 1.4827 on Wednesday.
The dollar also fell against other currencies, hitting the lowest level against the euro and the Japanese yen for the past six weeks.
Sterling was pushed lower after figures from the Confederation of British Industry confirmed a sharp downward trend in manufacturing.
The UK currency is expected to remain under broad selling pressure amid a grim outlook for the British economy.
POUND STERLING v EURO: 11 December 2008 *All Times GMT
However, some analysts have expressed doubts that the rise of the euro against the pound is a sustainable trend, particularly if European economies also continue to weaken.

"If the eurozone is being perceived to still have rates at substantially higher levels, then obviously there's a positive rate spread, but I'm not convinced that its ultimately going to be positive as the dynamics of the eurozone economy are pretty weak," Rabobank markets strategist Jeremy Stretch said.
Interest rates have been cut both in the UK and in the eurozone, but they remain higher in the 15-member euro currency area.
The Bank of England has made two sharp cuts in rates, bringing them down to 2%, and many analysts expect more in the pipeline.
Lower interest rates make it less attractive for foreigners to hold pounds.
A weaker pound is better for the UK exporters but is bad news for British holidaymakers who plan to go abroad during the Christmas season, and also makes imported goods more expensive.
Meanwhile, the dollar's weakness has been attributed to the growing difficulties of the auto industry, whose $34bn bail-out is being negotiated in Congress.

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Japan hosts regional discussions

The talks between Japan's and China's prime ministers and the South Korean president are set to focus on boosting trade and increasing currency swaps.
They are also expected to discuss security issues and climate change.
Officials in Tokyo say the summit marks a "significant" development in Japan's relationship with its two neighbours.
The North Asian nations, former enemies, have held talks on the sidelines of international meetings, but this is their first independent trilateral summit.
At a separate meeting on Saturday, the South Korean and Japanese leaders condemned North Korea for showing an "uncooperative attitude" in the latest round of six-party talks aimed at dismantling its nuclear disarmament programme in Beijing this week.
Swap facilities

The trilateral summit between Japanese Prime Minister Taro Aso, South Korean President Lee Myung-bak and the Chinese Premier Wen Jiabao is being held in the southern city of Fukuoka. This is a great global recession which comes once in a hundred years, but by taking appropriate measures without any delay, we can minimise the impact Japanese Prime Minister Taro Aso
The BBC's Duncan Bartlett in Tokyo says the three leaders hope to discuss ways they can co-operate in overcoming the economic crisis which has left Japan in recession and hit growth in China and Korea.
The countries are planning to increase the amount of money they swap between them through the Chiang Mai Initiative on a permanent basis - a move which should benefit South Korea especially, as the won has lost a third of its value since the start of the year, our correspondent says.
Ahead of the talks, the South Korean central bank announced in a statement that it had increased its bilateral swap facility with the Bank of Japan to $20bn, and a similar facility with the People's Bank of China to $26bn.
Japan is also trying to put aside its past differences with China, partly because it was trade between them that helped pull Japan out of its last prolonged recession during the 1990s, he adds. The South Korean won has lost a third of its value since the start of the year
All three countries - which account for 75% of the region's economy and two-thirds of its trade - have announced major individual economic stimulus packages in recent months.
On Friday, the Japanese government increased by 23 trillion yen ($255bn) its stimulus plan, more than half of which will be used to bring stability to the financial markets. It follows a 27 trillion-yen package in October.
"This is a great global recession which comes once in a hundred years," Mr Aso said. "But by taking appropriate measures without any delay, we can minimise the impact."
Earlier this week, China revealed that its exports had fallen for the first time in seven years. However, it still reported a record monthly trade surplus.
Beijing launched a 4 trillion yuan ($586bn) stimulus plan last month, and on Wednesday pledged to boost public spending and cut taxes.
South Korea, the hardest hit by the financial crisis, meanwhile offered $130bn of guarantees on foreign-currency borrowing and liquidity to its banks.