Pound, Euro Tumble Against Dollar

The British pound fell the most against the dollar in 15 years and the euro weakened after European governments bailed out banks and investors lost confidence in the region's financial institutions.

The currencies also declined versus the Japanese yen after Belgium, the Netherlands and Luxembourg threw an 11.2 billion- euro ($16.3 billion) lifeline to Fortis, the largest Belgian financial-services firm, and the U.K. Treasury seized Bradford & Bingley Plc, the nation's biggest lender to landlords. The dollar rose the most in eight weeks against the euro after President George W. Bush and Congressional leaders agreed on a $700 billion plan to revive credit markets.

The euro weakened after the governments of Belgium, the Netherlands and Luxembourg bailed out Fortis to restore confidence in the company following a 35 percent drop in its share price last week.

The pound slid as much as 2.6 percent to $1.7959, from $1.8445 at the end of last week, the biggest intraday decline since Sept. 16, 1992. It was at $1.8040 as of 7:42 a.m. in New York, the lowest level since Sept. 19. The euro fell as much as 2.1 percent to $1.4302 and traded at $1.4361, from $1.4614. It weakened to 152.42 yen, from 154.94 yen at the end of last week.

The Australian dollar fell for a second day and New Zealand's currency slipped after U.S. lawmakers reached an agreement on a bank rescue plan, reviving confidence in the U.S. currency. The Australian dollar fell 0.7 percent to 82.51 U.S. cents at 4:22 p.m. in Sydney from 83.11 cents in New York on Sept. 26. It declined to 87.68 yen from 88.10 in New York. New Zealand's dollar slid 0.5 percent to 68.26 cents from 68.60 cents late last week. It bought 72.53 yen from 72.72 yen.

Russia's ruble
weakened the most in more than three weeks against the central bank's dollar-euro basket as the credit crisis spread across Europe and oil fell, denting demand for emerging-market assets. The ruble fell 0.4 percent against the basket to 30.3606 as of 2:32 p.m. in Moscow, the biggest drop versus closing prices since Sept. 4.

Earlier, India's rupee reached 47.115 per dollar, the weakest since June 2003, before trading at 47.01, down 1 percent from late in Mumbai on Sept. 26.

TradingEconomics.com, Bloomberg.com
9/29/2008 5:30:14 AM