Pound weaker on comments from Mervyn King

The pound and the euro both weakened Wednesday on chances that the Bank of England and the European Central Bank will cut interest rates again soon.

Comments from the governor of the Bank of England that the UK is probably already in a recession and that house prices will continue to drop there sent the pound to a one-week low versus the euro, with the pound trading at 78.8p to the euro while the UK currency was worth $1.6247 in late morning trade in New York.

At the same time the euro was worth ¥126.9839 and $1.2867.

Several emerging markets currencies were lower versus the US dollar as the Argentine peso traded at 3.2175 pesos to the dollar, while the Russian ruble fell to 26.928 rubles to the greenback, the Korean won was at 1,350.3 won to the US currency, the Brazilian real traded at R$2.1180 to the dollar and the Mexican peso traded at 13.605 pesos to the dollar.

The decline in Argentina’s peso came as the South American country looked like to be headed toward its second default in a decade after the Argentine president floated a plan to seize ten private pension funds.

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