Pound gains on USD

The pound strengthened versus the US dollar Thursday on remarks from Bank of England governor Mervyn King, who said that the Bank will do whatever is necessary to cut inflation in the UK, which the bank expects to rise above 4 percent before the end of the year.

At 12:30 p.m. in New York, it took $1.9866 to buy a pound while the UK currency traded at 79.20p to the euro.

Interest rate expectations also affected the US dollar, which weakened in relation to the euro and the yen as chances faded that the Federal Reserve will raise rates anytime soon.

The dollar traded at $1.5734 to the euro in early afternoon trade in New York, while it took ¥107.2050 to buy a dollar.

The Australian and New Zealand dollars both saw gains again after the Fed’s decision to hold interest rates at 2 percent, maintaining those two currencies’ advantage as favorite currencies for investors to purchase in carry trades at their current yields of 7.25 percent and 8.25 percent respectively.

The Aussie was worth 95.68 cents US and it took ¥102.5684 to buy an Australian dollar, while the kiwi traded at 75.67 cents US and at ¥102.5684.

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