Pound weaker on data, remarks

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The pound weakened Wednesday after Chancellor of the Exchequer Alistar Darling told Parliament that the UK economy will contract by 3.5 percent this year.

Mr. Darling also told Parliament that the Debt Management Office will raise £220 billion through the sale of gilts by March of next year.

Also hurting the UK currency was a report from the Office for National Statistics which said that 177,000 more people were unemployed in the UK in the three months ending in February, bringing the total number of individuals unemployed there to 2.1 million.

It was also reported that the UK’s deficit was up to £90 billion ($117 billion) in the year ending in March.

At nearly 10:30 a.m. in New York, the pound traded at 89.62p to the euro while it took $1.4539 to buy a pound.

The yen strengthened after a government report said that Japan’s exports dropped by 45.6 percent in March compared to the same month last year, after having dropped 49.4 percent in February, as the slight comeback was taken to be a sign that the recession is moderating.

Some of the gains were lost by morning trade in New York however, as the yen traded at ¥127.9805 to the euro and at ¥98.225 to the US dollar.