Dollar firms, sterling hit by Northern Rock bank panic

Chief Regulatory Officer at CSE Renuke Wijayawardhane presenting the listing certificate to Executive Chairperson at Renuka Hotels Shibani Thambiayah

NEW YORK, Sept 14, 2007 (AFP) – The dollar steadied Friday a day after plunging to a record low on the euro, while the pound fell on jitters after a Bank of England bailout of key British lender Northern Rock. In late New York trade, the dollar stood at 115.35 yen after 115.04 Thursday and 1.1896 Swiss francs from 1.1860.

The single European currency dipped to 1.3876 dollars at 2100 GMT, down from 1.3881 late Thursday in New York.

The euro on Thursday soared to a record 1.3927 dollars on fears for the future of the US economy and expectations of a rate cut by the Federal Reserve.

The greenback on Friday was boosted by profit-taking in the euro and risk aversion on the part of investors who saw the dollar as a refuge following the Northern Rock bailout.

The crisis at Northern Rock, a victim of the global credit squeeze that itself was brought on by the sharp downturn in the US housing market, also weighed heavily on the pound.

The pound sank to 2.0075 dollars from 2.0252 on Thursday as customers of Northern Rock rushed to withdraw their savings, forming lengthy queues in front of branches despite assurances that deposits were safe.

Meanwhile US data suggested slowing in the world’s