Pound, euro gain on greenback

The pound gained on the US dollar Monday but was weaker versus the euro, trading at 81.56p to the euro while it took $1.5669 to buy a pound, but gains for the UK currency against the greenback could be limited by sentiment that the Bank of England could cut interest rates further.

There were also gains for the euro against the US dollar, which traded at $1.2778 to the shared currency, but the euro also stood to lose gains after comments from European Central Bank president Jean-Claude Trichet in Brazil hinted that Eurzone interest rates could also fall again soon.

Meanwhile, the yen weakened Monday on a return to interest in carry trades after China announced a stimulus package worth 4 trillion yuan ($586 billion) over the next two years, much of which will be spent on infrastructure improvements in China.

By later in the New York session, the yen had made back some of its declines by just before 12:30 p.m., when it traded at ¥125.2356 to the euro, at ¥98.005 to the US dollar, at ¥67.75 to the Australian dollar and at ¥57.482 to the New Zealand dollar.

The South African rand made gains on more enthusiasm for risk, but had given back some of those advances by early afternoon trade in New York, when it traded at R10.066 to the US dollar and at R12.862 to the euro while it took ¥9.7362 to buy a rand.

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