Pound, USD weaken versus yen

Story link: Pound, USD weaken versus yen

The flow of bad economic news continued to hurt the pound and the US dollar Thursday as the pound lost ground to the yen and the dollar and the dollar was weaker in relation to the yen.

The pound was hurt by a report from the Financial Services Authority which showed that home repossessions in the UK were up 92 percent in the third quarter and ahead of a separate report due Friday from the Office for National Statistics, which could show that the UK economy contracted by as much as 1.2 percent in the fourth quarter of 2008.

There are also concerns that the UK government could nationalize banks there.

In the United States, meanwhile, the Labor Department reported that first-time jobless claims were up to 589,000 in the US last week, significantly above expectations of about 540,000 new filings.

4.6 million people continued to receive unemployment benefits, nearly 2 million more than last year at the same time, while in the week ending 3 January, over 2 million individuals asked for their benefits to be extended.

This news on joblessness in the US came as Microsoft (NAS: MSFT), Intel (NAS: INTC; SEHK: 4335) and UAL Corp (NAS: UAUA), the parent company of United Airlines, all joined the list of companies announcing job cuts.

Bad news for the euro came in the form of a report showing that consumer spending was down in France in December.

In late morning trade in New York, the yen traded at ¥121.8802 to the pound, at ¥88.485 to the greenback, and at ¥114.4844 to the euro.

The pound traded at 93.93 to the euro while it took $1.3774 to buy a pound.

The strength of the yen was not good news for the Japanese economy as exporters there continue to be hurt by the yen’s gains at the same time that Japan’s exports were reported to be down 35 percent in December 2008 compared to the same month in 2007.