Pound gains before losses on statement, data

The pound gained in relation to the US dollar, the euro and the yen in London trade on Tuesday, but by late morning in New York the UK currency had given up some of those gains on a statement by a Bank of England official that financial markets are still under “acute” stress and after new data showed that home repossessions in the UK in the second quarter grew by 71 percent.

By late morning in New York, the pound was trading at 80.15p to the euro while it took $1.5574 or ¥148.4128 to buy a pound.

The Japanese yen weakened versus the US dollar and the euro after gains in equities markets made it look as if investors would return to carry trades financed with the lower-yielding Japanese currency.

In late morning trade in New York, the yen traded at ¥95.295 to the US dollar while it was at ¥118.9567 to the euro, while it also fell versus the Australia and New Zealand dollars, at ¥59.3783 and ¥52.533 respectively.

The euro was up earlier against the greenback but later lost some of those gains as the dollar traded at $1.2483 to the euro on expectations that both the European Central Bank and the Federal Reserve will cut interest rates again soon.

The US currency also lost ground early to a number of in-demand Latin American emerging markets currencies but, again, as trade progressed in New York, some of those gains were given back.

The Brazilian real traded at R$2.2835 to the US dollar as Banco Central do Brasil was expected to hold interest rates at 13.75 percent when it meets Wednesday, while the Mexican peso traded at 13.29 pesos to the dollar, the Chilean peso was at 676 to the dollar and the Colombian peso traded at 2,395.5 to the greenback.

In another region of the world, the South African rand was at R10.66 to the US currency.

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