Pound gains on USD, euro

The pound strengthened Thursday on comments by a Bank of England official that highlighted the need to make inflation the Bank’s priority in setting policy after UK inflation grew again in August, rising to 4.7 percent.

The UK currency traded at 79.32p to the euro in morning trade in New York while it took $1.8482 to buy a pound and the yen was at ¥196.4957 to the pound.

The Swiss franc also gained on the US currency and the euro, helped by its safe-haven status as investors worried about comments made by President George W. Bush indicating that failure to reach an agreement on a bailout plan for the US financial sector could send the US economy into a recession.

At nearly 11 a.m. in New York, the Swiss franc traded at SFr1.0854 to the US dollar and at SFr1.5913 to the shared currency.

The Canadian dollar also gained versus the US dollar on worries that an agreement between the Bush administration and Congress on the bailout plan could be delayed, with the loonie trading at C$1.0353 to its US counterpart.

The US dollar was also hurt not only by wrangling over the bailout plan but also by growing sentiment that the Federal Reserve will cut interest rates when it meets next in October.

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