Unemployment rise hurts pound

Unemployment rise hurts pound

Story link: Unemployment rise hurts pound

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The pound was down Wednesday after unemployment claims rose more than expected and on the news that the Bank of England voted unanimously to print more cash.

The Office of National Statistics said that unemployment claims in the UK were up by 138,400 to 1.39 million, against an expected rise of 84,800, the fastest rate of increase since 1971, while it was reported that the Bank of England voted to print up to £79 billion as part of its quantitative easing plan.

Additionally, a leaked report from the International Monetary Fund was said to have predicted that the global economy will likely contract by 0.6 percent this year while the UK economy will contract by 3.8 percent this year and by 0.2 percent in 2010.

In late morning trade in New York, the pound had made back some of its losses to trade at 93.84p to the euro, while it took $1.3972 to buy a pound.

The Swiss franc strengthened again versus the euro, the pound and the greenback on safe-haven demand as equities markets saw declines and after the Federal Statistics Office reported that retail sales in Switzerland were up 1.2 percent in January after a gain of 3.6 percent in December.

At around 11:30 a.m. in New York the franc traded at SFr1.5309 to the euro, and SFr 1.6314 to the pound and at SFr1.1676 to the US dollar.

The dollar, meanwhile, was hurt by reduced demand as it traded at $1.3111 to the euro and the yen gained on the greenback to ¥97.945 to the US currency.