Pound Slumps to Record Versus Euro


The pound fell the most in six years against the euro, declining to a record, after the Federal Reserve cut its discount rate and JPMorgan Chase & Co. bought Bear Stearns Cos.

The pound also slipped to a three-year low against the yen, and gilts soared, after the Bank of England followed its U.S. counterpart's lead in offering extra cash to lenders to ease a money-market squeeze. The Fed lowered the rate on direct loans to banks by a quarter-point to 3.25 percent, its first weekend emergency action since 1979, sending stocks lower and prompting investors to pare holdings of higher-yielding currencies.

The pound dropped to 79.12 pence per euro, the lowest level since the common currency's 1999 inception, and was at 78.60 pence by 12:51 p.m. in London, from 77.58 pence at the end of last week. It fell to $2.0060, from $2.0202.

Britain's currency fell to 194.22 yen, the lowest level since January 2005, from 200.18 yen on March 14 and traded at the weakest since October 1996 versus the Swiss franc, at 1.9724 from 2.0166.


TradingEconomics.com, Bloomberg
3/17/2008 6:43:41 AM