With thousands of food packages delivered, the company has not only provided sustenance but also a sense of hope to those facing the adversity of natural calamity
Sterling fell, hitting a record low against the euro after weak figures on UK housing and consumer sentiment bolstered the belief that the British economy is weakening and that the Bank of England will cut interest rates next month.
The euro was down 0.1 per cent at $1.5765 by 0918 GMT, but hovered in reach of all-time peaks above $1.59 hit last week.
It was on track to clocking its best quarterly performance against the dollar in more than three years. The U.S. currency has taken a beating on the view that the already weak U.S. economy will continue to suffer, keeping the door open to more aggressive interest rate cuts.
“The dollar is likely to remain in a very weak position in the near term,” said Ian Stannard, senior foreign exchange strategist at BNP Paribas. “Comments from the Fed overnight continue to paint a grim picture of the situation in the U.S. and there’s an increasing risk of the U.S. moving into a recession.”
Atlanta Fed President Dennis Lockhart said on Thursday the economy may be slipping into recession and that the Fed must cushion the pain. This raised expectations of more rate cuts after the central last week slashed its benchmark lending rate by 75 basis points to a three-year low of 2.25 per cent.
On the heels of data confirming that economic growth nearly slowed to a halt in the fourth quarter, other Fed officials said the U.S. mortgage crisis is continuing to strangle consumer spending.
By contrast, European Central Bank President Jean-Claude Trichet’s remarks this week that euro zone rates were at the right level cooled expectations of a near-term rate cut from 4.0 per cent.
Traders said the common currency could test $1.60, as investors focus on the widening yield advantage of the euro over the dollar.
U.S. data due at 1230 GMT is expected to show that the core personal consumption expenditure price index, a widely-watched gauge of inflation pressures, rose just 0.1 per cent in February, which would suggest that price pressures are slowing.
Traders sold sterling after the Nationwide Building Society figures showing that British house prices fell 0.6 per cent this month, adding to a 0.5 per cent drop in February and suggesting that the housing market is deteriorating quickly.
The euro edged up more than half a per cent to a record high 79.145 pence, while sterling was down 0.6 per cent at $1.9955.
The dollar rose 0.6 per cent to 100.25 yen. The yen had come under selling pressure earlier in the day on reports that North Korea had fired short-range missiles. Analysts saw this as a show of anger at Washington and the new conservative government in Seoul.
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The yen showed little reaction to news that Japan’s core consumer inflation in February rose more than expected and scored the biggest increase in a decade.
Meanwhile, market participants said that the dollar may come under renewed selling pressure. Traders were on high alert for rumours of more troubles at U.S. investment banks as the fallout from the credit crisis continues.
The U.S. currency had slipped in Asian trade on chatter that Lehman Brothers could suffer a fate similar to the near collapse of Bear Stearns, which hurt sentiment. Lehman called the rumours ”totally unfounded”.
With thousands of food packages delivered, the company has not only provided sustenance but also a sense of hope to those facing the adversity of natural calamity
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