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| Version 2 | Version 3 |
|---|---|
| Dollar keeps falling against euro | Dollar keeps falling against euro |
| (about 4 hours later) | |
| The euro has risen to new highs against the dollar, near the $1.38 mark, amid lingering worries about the US economy. | The euro has risen to new highs against the dollar, near the $1.38 mark, amid lingering worries about the US economy. |
| With investors fearful the US housing slump will hit the wider economy, the euro rose as high as $1.3784 before pulling back slightly to $1.3761. | |
| The dollar's latest fall came after the Standard & Poor's credit rating agency said it may downgrade $12.1bn of bonds backed by US sub-prime home loans. | The dollar's latest fall came after the Standard & Poor's credit rating agency said it may downgrade $12.1bn of bonds backed by US sub-prime home loans. |
| Meanwhile, the pound hit $2.0336 as it extended its gains against the dollar. | |
| See how the dollar has lost ground against the euro | See how the dollar has lost ground against the euro |
| The pound is at a 26-year high against the US currency amid contrasting prospects for interest rates in the two countries. | The pound is at a 26-year high against the US currency amid contrasting prospects for interest rates in the two countries. |
| The result has been to put the dollar under some sustained pressure David Jones, CMC Markets Q&A: Strong pound | The result has been to put the dollar under some sustained pressure David Jones, CMC Markets Q&A: Strong pound |
| US housing worries led to falls in Asian and European stock markets in early trading, echoing weakness on Wall Street on Tuesday. | US housing worries led to falls in Asian and European stock markets in early trading, echoing weakness on Wall Street on Tuesday. |
| By mid-morning, the euro had eased slightly to $1.3740 against the dollar. | By mid-morning, the euro had eased slightly to $1.3740 against the dollar. |
| "Currency markets have arguably been left focusing on just one point at the moment and that's concern over the possible collapse of the US sub-prime lending market," said David Jones, chief market analyst at CMC Markets. | "Currency markets have arguably been left focusing on just one point at the moment and that's concern over the possible collapse of the US sub-prime lending market," said David Jones, chief market analyst at CMC Markets. |
| "The result has been to put the dollar under some sustained pressure." | "The result has been to put the dollar under some sustained pressure." |
| Repossessions | Repossessions |
| Sub-prime mortgages are higher-risk loans given to borrowers with a poor credit rating or those on low incomes. | Sub-prime mortgages are higher-risk loans given to borrowers with a poor credit rating or those on low incomes. |
| US house repossessions in the sector have reached record highs this year. | US house repossessions in the sector have reached record highs this year. |
| Both the euro and the sterling have benefited from recent interest rates rises by the European Central Bank (ECB) and the Bank of England. | Both the euro and the sterling have benefited from recent interest rates rises by the European Central Bank (ECB) and the Bank of England. |
| While the ECB has kept eurozone rates on hold at 4% this month, they have doubled in 18 months, and more rises are expected by the end of the year. | While the ECB has kept eurozone rates on hold at 4% this month, they have doubled in 18 months, and more rises are expected by the end of the year. |
| The Bank of England last week increased rates to 5.75%, and most analysts expect a further rise before the end of the year, as both it and the ECB move to slow inflation. | The Bank of England last week increased rates to 5.75%, and most analysts expect a further rise before the end of the year, as both it and the ECB move to slow inflation. |
| In contrast, US rates were kept on hold at 5.25% following the Federal Reserve's most recent rate-setting meeting last month. It was the eighth time in succession that the Fed had left rates unchanged. | In contrast, US rates were kept on hold at 5.25% following the Federal Reserve's most recent rate-setting meeting last month. It was the eighth time in succession that the Fed had left rates unchanged. |
| back to story | back to story |