The British pound continued its fall against the dollar

The US dollar rose vs. most major currencies today as investors continue to enter into its safe-haven status as the reserve currency. The dollar also benefitted from comments by US Treasury Secretary nominee Timothy Geithner, who said that a strong dollar is in US interest. In economic data, new US housing starts and permits fell 15.5% to a record low in December. The number of new claims for jobless benefits rose by a more-than-expected 62,000 last week. Microsoft Corp. added to the bad news today announcing 5,000 jobs to be cut over the next 18 months.

The euro fell against the dollar as the sentiment has been hurt by ratings downgrades of euro-zone countries. S&P cut Portugal’s sovereign rating yesterday after already downgrading Spain and Greece.

The British pound continued its fall against the dollar, down 2% on the day to a low of $1.3691 and nearing a 23-year low. The trend is set to continue as investors find no reason to hold the pound with the UK’s continued weakness.

The Japanese yen remains range bound against the dollar after hitting a 13-year high of 87.11 against the dollar yesterday. The strong yen has hurt Japanese exports as it plunged a record 35% in December from a year earlier. Finance Minister Shoichi Nakagawa signaled some concern over the strength of the yen and mentioned possible intervention.

The Canadian dollar weakened against the dollar today with falling oil prices and gloomy economic data. The fall in the price of oil causes the loonie to weaken as it is a major exporter of crude oil. Canadian retail sales dropped 2.4% in November showing the economic weakness.

The Australian and New Zealand dollars remained pressured against the dollar with risk aversion due to concerns over the global banking sector. Concerns over economic data in Asian countries also hurt the two currencies. Especially with China’s economic growth dropping to 6.8% last quarter, as Australia is a major commodities exporter. Economists expect another hefty interest rate cut by the Reserve Bank of New Zealand when they meet on January 29.