Wednesday, July 11, 2007

U.K. Pound May Advance Against Dollar on U.S. Subprime Concerns, Yield Gap

(Bloomberg) -- The pound may strengthen against the
dollar on speculation the Bank of England will raise interest
rates further this year while a slowdown in the U.S. housing
market keeps the Federal Reserve on hold.

The pound rose to a 26-year high versus the dollar
yesterday after Standard & Poor's said it may cut ratings on $12
billion of bonds backed by U.S. subprime mortgages. The pound
has gained 3.5 percent against the dollar this year as investors
bought the U.K. currency to take advantage of the highest rates
among the Group of Seven industrialized nations.


Read more at Bloomberg Currencies News

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