Exchequer remarks hurt pound

The pound weakened Wednesday after Chancellor of the Exchequer Alistar Darling told Parliament that the UK economy will contract by 3.5 percent this year.

In addition, two separate reports said that joblessness in the UK was up to 2.1 million after 177,000 more people became unemployed in the three months ending in February and that the UK’s deficit was up to £90 billion ($117 billion) in the year ending in March.

At nearly 10:30 a.m. in New York, the pound traded at 89.62p to the euro while it took $1.4539 to buy a pound.

The yen gained ground after a government report said that Japan’s exports dropped by 45.6 percent in March compared to the same month last year, after having dropped 49.4 percent in February, as the slight comeback was taken to be a sign that the recession is moderating, but by mid-morning in New York the Japanese currency had lost some of those advances.

The yen traded at ¥127.9805 to the euro and at ¥98.225 to the US dollar at mid-morning in New York.

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