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FX round-up: Sterling down after rate decision

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Date: Friday 11 Jul 2008

LONDON (ShareCast) - Sterling eased a little on Thursday even though UK interest rates were kept at 5% by the Bank of England as expected.

Rates were held at the same level as the BoE decided the threat of recession is currently too great to start tackling soaring inflation with higher borrowing costs.

Adding more pressure were new figures from Halifax. An average home cost £180,344 last month, 2% less than in May when prices fell 2.5%, said the UK's largest mortgage lender.

The dollar was mixed against other major currencies on renewed credit fears as shares in mortgage firms Fannie Mae and Freddie Mac slid on capital concerns.

Fannie Mae and Freddie Mac took a hammering as Former St. Louis Fed President William Poole suggested they may need a government bailout even though Treasury Secretary Henry Paulson said that the companies are "adequately capitalised".

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