Sterling weaker on subprime worries

Sterling weaker on subprime worries

Story link: Sterling weaker on subprime worries

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Worries that troubles in the US subprime mortgage sector were beginning to show up in the UK hurt sterling after it became known that the Bank of England had made emergency loans of £314 million at a rate of 6.75 percent.

In addition, one UK hedge fund was forced to sell assets when it couldn’t borrow money in the commercial market and another said that its profits were down.

In midday trade in New York, sterling was down 0.3 percent versus the US dollar to $1.9805, while it had dropped 0.5 percent to £0.6810 in relation to the euro and was 0.8 percent lower against the yen, to ¥226.50.

The yen, meanwhile, was also stronger against other currencies, adding 0.3 percent to ¥154.30 against the euro and gaining 0.4 percent to ¥114.40 versus the greenback.

The US dollar was 0.1 percent lower to $1.3490 versus the euro.