Pound weaker on economic forecast

The pound weakened Monday on a Confederation of British Industry forecast that the UK economy will shrink by 3.9 percent this year and after a report from Rightmove (LSE: RMV) showed UK house prices 7.3 percent lower in the past year, although prices rebounded by 1.8 percent in April from March.

The pound traded at 89.91p to the euro in late morning trade in New York while it took $1.4533 to buy a pound.

The euro was also weaker as it looked like European Central Bank officials were still in disagreement over how low Eurozone interest rates might fall.

It cost $1.2922 to buy a euro in late morning trade in New York, while the shared currency was worth ¥127.0707.

Meanwhile, the Australian and New Zealand dollars declined as investors looked to lower-yielding currencies such as the US dollar and the yen as safe investments, at least partly on concerns surrounding the apparent disagreement among ECB officials, as well as on declines in equities markets.

Also, the Aussie declined on a report that producer prices in Australia dropped 0.4 percent in the first quarter, against expectations that they would go higher.

The Australian dollar traded at 70.34 cents US and it took ¥69.1707 to buy the Aussie at late morning in New York, while the New Zealand dollar traded at ¥54.664 and was worth 55.62 cents US.

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