Friday, December 01, 2006

But The Economy Is Strong, Right?

Frantic trading as fears of US housing meltdown grow Britons will head across Atlantic for bargains.

That doesn't sound good. What's going on here?
The dollar continued its seemingly unstoppable decline o­n the foreign exchanges yesterday, hitting a 14-year low at just below $1.97 to the pound as analysts predicted the two-dollar pound mark may soon be breached.

The dollar was last this low against the pound in September 1992, when Britain was forced out of the European Exchange Rate Mechanism, the euro's forerunner.

The news is likely to further boost airline bookings from bargain-hungry Britons rushing off to the United States for a pre-Christmas shopping bonanza.

The greenback fell more than 1%, or nearly 2.5 cents, in frantic trading in the world's dealing rooms after investors were panicked in particular by a key survey showing business activity for November in the US midwest contracted for the first time in three and a half years. The market had been expecting modest growth.

Good thing paper has other uses besides buying things.

(read more)


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