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Pound at new high against dollar Pound at new high against dollar
(about 1 hour later)
Both the pound and the euro have risen to further highs against the dollar, on growing expectations of a cut in US interest rates.Both the pound and the euro have risen to further highs against the dollar, on growing expectations of a cut in US interest rates.
With the Federal Reserve widely tipped to reduce US rates later on Wednesday, the pound hit a fresh 26-year high of $2.0743 in early trading.With the Federal Reserve widely tipped to reduce US rates later on Wednesday, the pound hit a fresh 26-year high of $2.0743 in early trading.
Meanwhile, the euro touched $1.4467, its fourth all-time high against the greenback in as many days.Meanwhile, the euro touched $1.4467, its fourth all-time high against the greenback in as many days.
The value of the pound has been further strengthened by upbeat UK housing data.The value of the pound has been further strengthened by upbeat UK housing data.
US economic woesUS economic woes
Analysts said the figures, showing that UK house prices rose sharply in October, made it even more likely that the Bank of England would keep UK rates on hold at 5.75% at its meeting next week.Analysts said the figures, showing that UK house prices rose sharply in October, made it even more likely that the Bank of England would keep UK rates on hold at 5.75% at its meeting next week.
Dealers are showing no hesitation in selling the dollar against the euro Tsutomu Soma, Okasan Securities.Dealers are showing no hesitation in selling the dollar against the euro Tsutomu Soma, Okasan Securities.
Taken together with the expectation that the Fed will cut US rates later on Wednesday from the current 4.75%, this makes the pound more lucrative than the dollar for investors.Taken together with the expectation that the Fed will cut US rates later on Wednesday from the current 4.75%, this makes the pound more lucrative than the dollar for investors.
The Fed is under pressure to reduce US interest rates further to help boost the struggling housing market, amid growing signs of weakness in the wider economy.The Fed is under pressure to reduce US interest rates further to help boost the struggling housing market, amid growing signs of weakness in the wider economy.
It cut its benchmark interest rate to 4.75% from 5.25% in September. A key report showed on Tuesday that US consumer confidence declined for the third month in a row in October to its lowest level in two years.
The Fed cut its benchmark interest rate to 4.75% from 5.25% in September.
'Mass selling'
"Dealers are showing no hesitation in selling the dollar against the euro as they think the Fed is likely to go for more rate cuts, even after the one expected today," said Tsutomu Soma, senior manager of foreign securities at Okasan Securities."Dealers are showing no hesitation in selling the dollar against the euro as they think the Fed is likely to go for more rate cuts, even after the one expected today," said Tsutomu Soma, senior manager of foreign securities at Okasan Securities.
Niels Christensen, FX strategist at Nordea in Copenhagen, added: "Everybody is looking for a US rate cut this evening and selling the dollar across the board."Niels Christensen, FX strategist at Nordea in Copenhagen, added: "Everybody is looking for a US rate cut this evening and selling the dollar across the board."
The latest UK house price data came from mortgage lender Nationwide.The latest UK house price data came from mortgage lender Nationwide.
It found that house prices rose at an annual rate of 9.7% in October, up from September's 9% gain.It found that house prices rose at an annual rate of 9.7% in October, up from September's 9% gain.