Pound Falls Versus Dollar as Stocks Drop Amid Recovery Concern

By Anna Rascouet

Oct. 2 (Bloomberg) -- The pound fell against the dollar, headed for a third straight weekly decline, as U.K. stocks fell amid signs the worst of the recession has yet to pass.

The British currency also weakened against the euro after Nationwide Building Society revised its estimated increase in house prices for August to 1.4 percent, from 1.6 percent. Investors should sell the pound against the dollar amid expected declines in stocks around the world, UBS AG, the world’s second- biggest foreign-exchange trader said today. The FTSE 100 Index of U.K. shares dropped 0.8 percent.

“Recoveries are never one way and the market has become a bit jittery,” said Lauren Rosborough, a senior currency strategist at Westpac Banking Corp. in London. The pound-dollar rate “has been hurt quite strongly on the back of that.”

The pound fell to $1.5881 as of 8:33 a.m. in London, from $1.5955 yesterday. It traded at 91.52 pence per euro, from 91.17 pence yesterday.

To contact the reporter on this story: Anna Rascouet in London at arascouet@bloomberg.net