Pound weaker on recession forecast for UK

The pound was weaker in relation to the euro and the dollar again Friday after UBS (NYSE: UBS; SWX: UBSN; TYO: 8657) forecast that the second half of the year will bring recession to the UK economy.

More declines in house prices and yesterday’s decision by the Bank of England to hold interest rates steady also hurt the UK currency, but declines versus the greenback were tempered somewhat by the news that from the US Labor Department that the US economy lost 84,000 jobs in August.

At late morning in New York, the pound traded at 80.75p to the euro while it took $1.7668 to buy a pound.

The Japanese yen, meanwhile, strengthened against the euro and the US dollar as investors backed away from carry trades, and on the higher US unemployment rate, which job losses took to 6.1 percent last month.

Late morning trade in New York found the yen trading at ¥106.4250 to the greenback and at ¥151.8312 to the euro, while it was at ¥86.0126 to the Australian dollar and traded at ¥70.675 to the New Zealand dollar.

More declines in commodities prices and worries that the economic slowdown in the US will spread to other global economies also hurt the Australian and New Zealand currencies.

The Australian dollar was worth 80.82 cents US in New York trade while the New Zealand dollar traded at 66.39 cents US.

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