This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/8060842.stm

The article has changed 7 times. There is an RSS feed of changes available.

Version 0 Version 1
Dollar weakens after Fed minutes Markets fall as growth hopes fade
(about 3 hours later)
The dollar weakened against the pound after Federal Reserve minutes showed it considered adding to money supplies, easing concerns over dollar funding. Markets worldwide have fallen after Federal Reserve minutes showed the central bank has lowered its forecast for US growth.
One pound was worth $1.5817, its highest since November, before later falling to $1.577. Japan's Nikkei index ended nearly 1% lower while the FTSE100 fell 2.4%, Germany's Dax shed 1.9% and France's Cac declined 1.85% in morning trade.
The minutes showed the central bank would be prepared to buy more mortgage agency and government securities. UK shares were also hit after ratings agency Standard & Poor's downgraded the UK's outlook to negative.
As concerns over the supply of credit abate, investors are moving away from the greenback - a safe haven currency. The agency cited rising public debt, which hit a record in April.
Figures on Thursday revealed that public borrowing hit a new high of £8.46bn in April compared to £1.84bn in the same month last year.
Standard & Poor's said UK debt could be close to 100% of gross domestic product, and remain at that level in the medium term.
"There are concerns finally coming through about where the underlying growth is going to come from," said Justin Urquhart Stewart, investment director at Seven Investment Management.
"We need a growing level of demand. There's a certain amount of restocking happening, and unfortunately the market has been taking that as a sign of a recovery, which it is not," he said.
Meanwhile there was more pessimism about the US economy.
On Wednesday the Fed said it expected the economy would contract between 1.3% and 2% this year.
Earlier the bank predicted the economy could contract between 0.5% and 1.3%.
It also warned that US unemployment could reach 10%.
Sterling falling
New data from the UK led to a sharp reversal in the value of pound and dollar, after sterling had reached a new high against the greenback.
Following the downgrade by Standard & Poor's, sterling fell 3 cents to a low of $1.5514, from its highest in more than six months of $1.5817.
The pound also weakened against the euro, which was worth 88.69p.
Earlier sterling had risen after minutes from the Federal Reserve revealed the bank considered adding to money supplies, easing concerns over dollar funding.
"The Fed said exactly what the market wanted to hear so it could sell the dollar, although it's too early to say whether its a decisive trend that will hurt the dollar," one portfolio manager at a Japanese firm said."The Fed said exactly what the market wanted to hear so it could sell the dollar, although it's too early to say whether its a decisive trend that will hurt the dollar," one portfolio manager at a Japanese firm said.
The dollar also weakened against the yen, falling to a low as 94.28.
"Dollar/yen is simply catching up other currency pairs in broad dollar selling," said Hideaki Inoue, chief manager of foreign exchange trading at Mitsubishi UFJ.
The value of the dollar has fallen sharply in recent months. In January, the pound hit a 23-year low of $1.35 against the dollar.
Last July however, the pound was worth more than $2 but later fell as signs of the UK recession increased.