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Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.
Fears of dollar collapse as Saudis take fright
Sterling slipped to new one-year lows yesterday as the banking crisis frightened international investors and encouraged talk of a sooner-than-expected rate cut by the Bank of England. The pound was back below $2 against the US currency and at its weakest level against the euro for 17 months after the publication of the minutes of the Bank's Monetary Policy Committee meeting earlier this month, which showed members taking a much more doveish tone than previously.
Pound falls to 12-month nadir
Morgan Stanley became the first US investment bank to truly bear the brunt of the credit crunch as it reported a 17pc drop in profits in the last three months.
Morgan Stanley hit by credit crunch
Leading fund managers now believe it is inevitable that the credit crunch will spill over from the financial sector into the wider economy, a widely-watched survey shows.
Fund managers fear crunch will weaken economy
Equities could again emerge as the asset class of choice in the UK, usurping property, once the global credit crisis eases, according to the head of Jupiter Asset Management.
Credit crisis may leave equities looking attractive, Jupiter boss says
A euphoric, Asia-wide stock rally, a huge lift to market liquidity and a phenomenon that traders are calling panic-buying boosted Hong Kong stocks to record highs. Continuing its relentless month-long surge, the Hang Seng index closed yesterday 3.98 per cent higher at 25,554.64 points.
Investors take Hang Seng to record highs