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To: Johnny Canuck who wrote (45878)	10/14/2009 8:09:06 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 68145

Currencies The Pound Goes Down Vidya Ram , 10.14.09, 01:00 PM EDT Sterling will continue to fall against the euro, but that's good news for U.K. company profits. CurrencyShares British Pound Sterling Trust 10/14/2009 4:00PM ET * $159.43 * $0.88 * 0.56% * At A Glance * Chart * News * People Full FXB Chart at BATS Real-Time Market Data by Xignite LONDON -- The British pound's recent weakness is good news for U.K. companies as earnings season commences. The weak pound supported sales of handbags and leather goods at British luxury-goods maker Burberry, while even distiller Diageo (whose overall results disappointed on Wednesday) benefited from a stronger euro and dollar. (See "Burberry Sets Stage For Luxury Revival" and "Diageo Sales Lack Fizz.") Article Controls Emailemail imageprint imagereprint imagenewsletter imagecomments imageshare imagedel.icio.us imageDigg It! imageyahoo imageFacebook imageTwitter imageReddit imagerss Yahoo! Buzz The sharpest declines of the pound have happened in the last couple of weeks. On Tuesday, the pound hit a six-month low against the euro after the consumer price index for September fell to its lowest annual rate in five years. But the consequences of that on exporters and even domestic sales should be felt extensively in the third quarter. Insurers such as Aviva and Prudential, with large European presences, should do marginally better than their rivals that mainly focus on the domestic market, predicts Panmure Gordon insurance analyst Barry Cornes. But even domestically focused companies can feel the benefit. "Importing products from abroad becomes more expensive all of a sudden so there is a natural substitution replacing foreign products with domestically produced goods," said Mike Lenhoff, chief strategist at investment manager Brewer Dolphin. After Tuesday's losses, the pound strengthened somewhat, rising 0.2% against the greenback to $1.5920, and remaining flat against the euro at 1.07 euros. The Currency Shares British Pound ( FXB - news - people ) exchange traded fund gained 0.4%. It has fallen by 4% in the last month alone, though it is still up 10% since the start of the year. Real-Time Quotes 10/14/2009 4:00PM ET intraday: FXB CurrencyShares British Pound Sterl... (FXB) * * $159.43 * $0.88 * 0.56% * At A Glance * Chart * News * People BATS Exchange Real-Time Market Data by Xignite Related Stories * Boldly Bullish * Europe Snaps Up Gains * Lloyds And The Cash-Call Question * iPhone's Orange Future * Europe Heads Into The Red Related Videos * Dow Crosses 10,000 * Strong Earnings Lift Markets * Headwinds For Housing * The Dollar And Wall Street * Intel Bucks Downturn * Quotes * Stories * Videos Rate This Story * Your Rating * Overall Rating Reader Comments Post a Comment Market watchers expect the currency to continue to slide towards the end of the year. Parity with the euro by the end of the year is a strong possibility, says Cantor FX currency strategist Duncan Higgins. "The downward trend is set to continue. With consistently negative economic data, the pressure is high," he said. A number of indicators have come in worse than expected, including the 2.5% drop in August industrial output in the U.K., reported last week. A small reprieve, however, comes from the closely watched issue of employment. Data from the Office of National Statistics on Wednesday showed a surprisingly small rise in the number of jobless claims in September. The figure rose 0.1% less than expected, to 5%. forbes.com