Dollar Falls Against Aussie, Rand, Real on Interest-Rate Spread

The dollar drop against the
Australian dollar, Brazilian Real and the South African rand on
speculation the interest-rate advantage for currencies of
commodity-exporting states will widen.

The U.S. currency traded near a two-week low against the
euro before studies that volition probably demo the U.S. housing
recession is deepening, bolstering the Federal Soldier Reserve's lawsuit for
lowering its benchmark adoption cost from 3 percent. The
Australian dollar rose to a three-month high after the Reserve
Bank of Commonwealth Of Australia said it considered a bigger addition when
raising its charge per unit to 7 percentage this month.

''The Federal will be forced to cut rates additional to back up the
economy,'' said Yuji Saito, caput of foreign-exchange gross sales in
Tokyo at Societe Generale SA, a unit of measurement of France's second-biggest
bank by marketplace value. ''The dollar looks weak, particularly
against high-yielders such as as Australia's dollar.''

The U.S. dollar drop as much as 0.9 percentage to 92.01 cents
versus Australia's dollar, the last since Nov. 9, before
trading at 91.92 cents at 1:48 p.m. inch Tokyo. It declined 0.3
percent against the rand to 7.5912 and dropped 1.1 percentage to
1.7337 to the real.

The dollar traded small changed at $1.4663 per euro. It
fell to $1.4709 on Feb. 15, the weakest since Feb. 5. The
currency bought 108.15 hankering from 108.23 yen. The Euro was at
158.60 hankering from 158.63. It may worsen to $1.4750 per Euro today,
Saito forecast.

Australian Dollar

The Australian dollar rose against all 16 major currencies
after cardinal depository financial institution Assistant Governor Malcolm Edey said inflation
may speed up and policy shapers considered additional involvement rate
increases.

Minutes from the Modesty Depository Financial Institution of Australia's Feb. Five meeting
published today showed Governor John Glenn Wallace Stevens and his colleagues
discussed raising the benchmark charge per unit by 50 footing points to cool
the fastest rising prices in almost two decades.

''The treatment about pecuniary policy inch the proceedings had a
much sharper sting in the tail as far as the near-term rate
outlook is concerned,'' wrote Saint David Delaware Garis, senior markets
economist at National Commonwealth Of Australia Depository Financial Institution Ltd. in Sydney, in a short letter to
clients. ''We still anticipate a 25 basis-point increase in March and
a 40 percentage opportunity of another.''

The output advantage on Australian two-year enslaveds over
similar-maturity U.S. Treasury Obligations increased to 5.04 percentage
points, the widest since December 1990.

The U.S. dollar have dropped 4.6 percentage versus the euro
since the Federal Soldier Modesty started to cut involvement rates on Sept.
18, the fourth-worst public presentation among the 16 most-active
currencies.

Dollar Weakness

The U.S. National Association of Home Builders/Wells Fargo
index of housebuilder sentiment may have got held at 19 for a second
month in February, one point above the record low pressure reached in
December, according to a study of economic experts by Bloomberg News,
before the information is released today. U.S. lodging starts remained
near a 16-year low in January, according to a separate Bloomberg
survey before a Commerce Department study tomorrow.

''The dollar is probably going to weaken again inch the near
term,'' said Sir Leslie Stephen Halmarick, co-head of economical and market
analysis at Citigroup Inc. in Sydney, in an interview with
Bloomberg Television. ''Overall, it makes expression like the U.S.
housing marketplace have a small spot of a manner to travel before you could
say the worst is over.''

Futures on the Windy City Board of Trade show a 26 percent
probability that the Federal will take down its mark for overnight
lending between Banks by 0.75 per centum point to 2.25 percentage by
March 18, compared with a 20 percentage opportunity a hebdomad ago. The
remaining likelihood are for a 50 basis-point cut.

Commodity Currencies

The Australian dollar and the South African rand also rose
as terms of natural stuffs the states exportation increased.

The Greater London Metallic Element Exchange index, based on the cost of six
metals including aluminium and copper, advanced 1.9 percent
yesterday to the peak since October.

''A rise in trade goodss terms is pushing up the Australian
dollar and the rand,'' said Norihiro Tsuruta, main strategian of
global investing research at Shinko Research Institute in Tokyo,
a unit of measurement of Japan's second-largest-bank by assets. ''Behind this
rise is that the marketplaces are now correcting inordinate pessimism
about the human race growth.''

Australia's currency may progress to 94 U.S. cents and 101
yen by the end of March, Tsuruta said.

Yields on two-year Australian authorities short letters climbed to an
eight-year high as bargainers increased stakes the Modesty Depository Financial Institution of
Australia will raise rates from 7 percentage on March 4.

''Australia's dollar is the strongest currency now,'' said
Joseph Kraft, caput of working capital marketplaces in Japanese Islands at Dresdner
Kleinwort, the investing depository financial institution owned by Germany's Allianz SE. ''While other cardinal Banks are considering film editing rates, the
RBA is the lone cardinal depository financial institution among major economic systems to head for
rate hikes.''

The currency may lift to 93 U.S. cents this quarter, Kraft
said.

To reach the newsman on this story:
Kosuke Goto in Tokio at at .

Pound Poised for Weekly Decline After Central Bank's Rate Cut

The lb was poised for the biggest
weekly diminution in three against the dollar and Euro on speculation
slowing economical growing will coerce the Depository Financial Institution of England to cut
interest rates further.

The U.K. currency drop against all 16 most-actively traded
currencies this hebdomad as policy shapers lowered the benchmark
lending charge per unit by a quarter-point to 5.5 percentage yesterday. Growth
in Europe's second-largest economy slowed in the three calendar months to
Nov. 30, the National Institute for Economic and Sociable Research
said today.

''There's still a downward way for sterling and interest
rates ahead of us,'' said Neil Jones, caput of European hedge-fund
sales in Greater London at Mizuho Capital Markets. ''The depository financial institution will be
forced to cut again and the output derived function will decline
relative to the euro.''

Against the dollar, the lb was at $2.0306 by 2:14 p.m. in
London, from $2.0563 on Nov. 30. The U.K. currency traded at 72.13
pence per euro, from 71.14. It bought 226.78 yen, a driblet of 10
percent since July 23, when it rose to a 26-year high.

The spread, or difference, in output between 10-year aureates and
similar adulthood German bunds narrowed 6 footing points this week
and was recently at 45 footing points, near the narrowest since
Sept. 2003.

The spreading may contract additional as the Depository Financial Institution of England keeps
lowering rates and the European Central Depository Financial Institution maintains its benchmark
on hold. The ECB held its cardinal charge per unit at 4 percentage yesterday and
lifted its rising prices prognosis for 2008 to 2 percent-3 percent,
from 1.5 percent-2.5 percent.

U.S. Payrolls

The lb pared today's additions against the dollar after a
government study showed employers in the U.S. hired more than workers
than prognosis in November. Payrolls rose by 94,000 after a 170,000
increase in October, the Labor Department said. Economists surveyed
by Bloomberg had prognosis an addition of 80,000 in payrolls.

The U.K. economic system expanded 0.6 percentage in the quarter, down
from 0.7 percentage in the three calendar months ended October, said London-
based NIESR, the research grouping whose clients include the Depository Financial Institution of
England and the U.K. Treasury.

Luxury-home prices in Greater London had their least addition in
November since January 2005, Knight Frank LLC said. The average
price of houses costing at least 2.5 million lbs ($5 million)
rose 0.1 percentage from October, according to an index compiled by
the existent estate broker.

Incorporate Inflation

The Depository Financial Institution of England cut its benchmark charge per unit for the first
time in more than than two years, saying billowy recognition costs may hurt
the economic system and assist incorporate inflation. The cost of borrowing
pounds for one calendar month have risen 66 footing points since the end of
November and was at 6.74 percentage today.

''Conditions inch fiscal marketplaces have got deteriorated and a
tightening in the supply of recognition to families and businesses
is in train, posing downside hazards to the mentality for both output
and inflation,'' the cardinal depository financial institution said in a statement.

The Federal Soldier Modesty and the Depository Financial Institution of Canada are also trimming
rates. Emma Goldman Sachs Group Inc. said Dec. Five the U.S. housing
recession is ''morphing into a planetary shock'' that volition slow
growth around the world.

Gilts headed for a weekly gain, with the output on the 10-
year chemical bond falling 3 footing points to 4.61 percent, from 4.64
percent on Nov. 30. The terms of the 4 percentage short letter owed 2016 rose
0.22, or 2.2 lbs per 1,000-pound human face amount to 95.67.

The two-year yield have fallen 5 footing points in the past
week to 4.47 percent.

To reach the newsman on this story:
Lukanyo Mnyanda in Greater London at