News and Articles

The dollar rose Wednesday to a record seven and a half years against the pound sterling because the problems of British banks continued to weigh on the pound, while the euro advanced against many major currencies.


The pound, which has lost 7 percent against the dollar since the beginning of the week, extended low by fears that the banks of Great Britain must restore its financial health as the economy deteriorates, and that the package days ago the Government announced no scope.


Shares of Britain's Barclays Plc lost one third of its value to a minimum in 24 years on Wednesday on the London Stock Exchange, the threat that needed to raise funds or nationalized.


Shares of rival UK bank Lloyds Banking Group also collapsed because faces a greater risk of nationalization.


"The UK financial system is torn to pieces," said Ron Simpson, director of currency analysis, Action Economics in Tampa, Florida. "We did not find a floor for sterling," he said.


In the first business in New York, the pound sterling lost 1.1 percent to $ 1.3742 even after fall to lowest since June 2001.


Data on Wednesday showed a sharp deterioration in British public finances and rising unemployment, but these indicators and the publication of the minutes of the last monetary meeting of the Bank of England was overshadowed by the banking problems.


The euro rose against other currencies, with an increase of more than 1 percent against the pound at 94.20 pence, according to Reuters, a record since the beginning of the month and close to the historic peak of 98.05 pence seen the month Last


Speaking to parliament, the European Central Bank President Jean-Claude Trichet downplayed the threat of deflation and rejected rumors that some members of the euro zone would leave by the financial crisis.


Against the yen, the dollar gained 0.2 percent to 89.97 units of currency in Japan.


"The environment for the dollar is still positive, the shares fell. The dollar and the yen is still strong in this environment aversa risk," said Marcus Hettinger, global currency strategist for Credit Suisse in Zurich.