Pound Falls

The pound fell to a record low against the euro for a third day after the central bank said the British economy will shrink through most of next year amid the global credit freeze.

The U.K. currency also declined to its lowest level versus the dollar since August 2002 after Bank of England Governor Mervyn King signaled policy makers aren't done cutting rates. The yen rose against the euro and the dollar as declines in commodity prices dented demand for higher-yielding assets funded in Japan. The euro was little changed against the dollar.

The pound traded as low as 82.38 pence per euro, the weakest since the single currency's introduction in 1999, and was at 82.31 by 7:40 a.m. in New York, from 81.41 yesterday. It fell to $1.5234, from $1.5384. The yen was at 97.46 per dollar, from 97.65. The euro was at $1.2527, from $1.2522.

The euro rose earlier, following a 1.8 percent decline yesterday, as a technical chart that traders use to predict price movements signaled the loss was overdone. It had reached $1.2477, the lowest since Oct. 28. The euro's 14-day stochastic oscillator was 20.03 yesterday. A level below 20 suggests a security has fallen too fast.

The ICE's Dollar Index, which tracks the greenback against six trading partners, was at 87.260, from 87.075 yesterday, when it reached 87.279, the highest level since Oct. 28.

TradingEconomics.com, Bloomberg.com
11/12/2008 6:20:59 AM