Forex - Sterling's woes continue; market awaits US retail sales data

Forex - Sterling's woes continue; market awaits US retail sales data

	Published : Fri, 14 Sep 2007 13:28 By : Agencies Print this Story

LONDON (Thomson Financial) - A series of factors combined to batter sterling today, which slumped to year lows against the euro, while the market awaited this afternoon's key US retail sales data for further direction on the dollar.

This morning's revelaton that UK mortgage lender Northern Rock PLC has had to seek emergency funding from the Bank of England sent the pound tumbling, but these falls were then exacerbated by a leak of the latest Rightmove survey revealing a 2.6 pct monthly drop in housing asking prices.

'Sterling is under pressure against all fronts this morning,' said Geoffrey Yu at UBS.

The Northern Rock news pushed the pound to nine month lows against the euro as investors began to fret about the potential implications for other major UK financial institutions.

The Rightmove news caused it to plummet further, however, with the euro reaching a year high of 0.6896 stg.

'On a day when we have had the Northern Rock news this is clearly negative,' said one London trader.

Elsewhere, the dollar recovered slightly against the euro after hitting record lows yesterday, but the single currency continued to hover not far under the 1.39 usd mark, with investors awaiting this afternoon's US retail sales numbers for direction.

Focus today will centre on the release of key US retail sales data, which should give some indication of the depth of the slowdown in the US after the very poor jobs data earlier this month.

Elsewhere, the yen was firmer as the Northern Rock news sparked an increase in risk aversion and an unwinding of yen carry trades.

London 1201 GMT London 0828 GMT

US dollar

yen 114.80 down from 115.05

sfr 1.1877 up from 1.1855

Euro

usd 1.3857 down from 1.3882

stg 0.6889 up from 0.6881

yen 159.09 down from 159.70

sfr 1.6461 up from 1.6460

Sterling

usd 2.0113 down from 2.0170

yen 230.87 down from 232.00

sfr 2.3884 down from 2.3917

Australian dollar

usd 0.8391 down from 0.8412

stg 0.4169 unchanged

yen 96.30 down from 96.78

New Zealand dollar

usd 0.7136 down from 0.7146

jessica.mortimer@thomson.com

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