Pound weaker on worries about US banks report

The pound was weaker versus the euro, the US dollar and the yen Wednesday on concerns that the US government report on banks, due Thursday, will say that Bank of America (NYSE: BAC) needs to raise $34 billion.

Declines for the UK currency could be limited, however, by a new report from the Chartered Institute of Purchasing and Supply which shows that an index of the UK services sector was up in April from March and by a separate report from Nationwide Building Society that consumer sentiment in the UK has improved.

At shortly after 11 a.m. in New York the pound traded at 88.35p to the euro while it took $1.5053 to buy a pound and the UK currency was worth ¥148.6377.

The US dollar was weaker in relation to the Australian dollar Wednesday after a private report from ADP employer services said that the US lost 491,000 private sector jobs in April, far fewer than had been anticipated, making investors more confidence in seeking out risky trades for higher-yielding currencies.

However, the official Labor Department report on jobs in April is expected to show a job loss in the private sector and government of 608.000 positions last month.

In late morning trade in New York, the greenback traded at 74.43 cents US to the Australian dollar while it was $1.33 to the euro.

The Brazilian real traded at 2.1243 to the dollar while the Mexican peso was at 13.235 to the greenback.

The peso’s gains came on comments from Mexico’s Health Minister that fewer cases of the H1N1 flu virus are being reported there.

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