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Last Updated: Monday, 24 November, 2003, 15:37 GMT
Pound touches 5-year dollar high
The pound has briefly touched a five-year high against the US dollar.

In overnight Asian trade, a pound was worth $1.705, although it slipped back below $1.7 in the European afternoon.

The dollar's weakness reflected worries over the US' ability to finance its trade deficit - currently equivalent to about 5% of annual economic output.

The rise in the value of the pound spells trouble for those UK companies that depend on the US for a high proportion of their sales.

Some of the UK's biggest companies - including BP, Vodafoneand Unilever - are heavily exposed to the US.

Greenback weakens

The dollar began its current slide two months ago when investors took the view that the US Government had relaxed its traditional "strong dollar" policy in an effort to stimulate exports.

The decline has accelerated since then amid evidence that foreign investors may be losing their appetite for US financial assets, making it more difficult for the US to finance its trade deficit with the rest of the world.

The US depends on strong sales of shares and government bonds to foreign investors in order to pay for imported goods whose value far outstrips the country's export earnings.

But sales of these assets to investors outside the US have fallen sharply in recent weeks.

The dollar has also lost ground against other world currencies, hitting its lowest value ever against the euro last week.

The dollar's weakness against the single currency has stirred fears that a tentative export-led recovery in Europe after a long period of stagnation could come unstuck.


MARKET DATA - 11:37 UK

FTSE 100
5428.78up
22.84 0.42%
Dax
5732.06up
18.55 0.32%
Cac 40
3783.91up
14.37 0.38%
Dow Jones
10403.79up
78.53 0.76%
Nasdaq
2273.57up
35.31 1.58%
Data delayed by at least 15 minutes



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