02 points while the allmarket IGPA index

NEW YORK (Reuters) - The U.S. dollar hit a 7-1/2-year peak against the pound on Tuesday as losses in the UK banking sector raised worries about the country's economy. Hot StocksThe dollar also rose against the euro on concerns about a deepening euro-zone recession.Optimism about newly inaugurated U.S. President Barack Obama's stewardship o the economy also boosted the dollar. The currency pared gains, though, when Obama did not pro ide details on economic crisis measures in his address.Sterling ell about 3.7 percent against the dollar and was on track to post its biggest daily drop since 1992 a ter the Royal Bank o Scotland (RBS.L) on Monday announced the biggest losses in UK corporate history."The market is a raid that the UK will turn into the next Spain or Greece," said Kathy Lien, director o currency research at G T orex in New York."O er the past ew months, they ha e been working o ertime to inject more stimulus into the economy, but the more that they spend, the worse impact it has on the UK's iscal position."Standard & Poor's on Monday downgraded Spain's credit rating, ollowing a similar mo e on Greece last week.A European Commission report on Monday that orecast the euro-zone economy would shrink 1.9 percent in 2009 also added to concerns, o ershadowing a bigger-than-expected impro ement in the German ZEW economic sentiment sur ey on Tuesday.Late in New York, sterling ell 3.7 percent to $1.3921 a ter touching $1.3860, its weakest le el since mid-2001.

A smaller-than- orecast decline in the UK in lation rate or December did little to stem the slide.The euro last traded 1.7 percent lower at $1.2880, ha ing tumbled as low as $1.2857, according to Reuters data, its weakest le el since December 9.Analysts said the European Central Bank may ha e to cut interest rates urther a ter deli ering a hal percentage point reduction to 2 percent last week.INAUGURATION BOOSTElsewhere, the dollar rose 1.3 percent against the Swiss ranc to 1.1478 rancs. The Australian and New Zealand dollars slid 3.3 percent and 4.3 percent respecti ely against the U.S. currency."It is not going to be a gangbuster mo e but our iew is that the U.S. economy is the irst that is going to solidi y and then to reco er," said Brian Belski, a U.S sector strategist at Merrill Lynch.

"Dollar strength is here to stay."The dollar also rose 0.9 percent against its Canadian counterpart to C$1.2654 a ter the Bank o Canada cut rates by hal a percentage point to a 50-year low o 1 percent.(Additional reporting by Nick Oli ari in New York; Editing by Leslie Adler) Hot Stocks. (Updates with closing stock prices) Stocks? ? ? ? Currencies? ? ? ? Bonds SANTIAGO, Jan 20 (Reuters) - Chile's peso weakened or asecond straight day and stocks slid with other markets up anddown the Americas on Tuesday as in estors caught global jittersabout the health o the world's largest banks. Chile's blue-chip IPSA index .IPSA closed down 0.83percent to 2,481.02 points, while the all-market IGPA index.IGPA ell 0.67 percent or the day to 11,821.31 points The all was more muted than sharp alls on U.S. marketsand other regional bourses, where in estors punished stocks onconcerns about corporate earnings with banking shares leadingthe all.

"The local bourse was in luenced by the per ormances o international markets, although our market ell a lot less thanthe rest because there was institutional und buying in certainsectors, like in retail," said Roberto Guzman, head o in estment at the IT Research brokerage. "We are plugged into what is happening abroad," saidMarcelo Ogaz, an analyst with BICE In estments in Santiago. Analysts said Chilean stocks should otherwise ha e beenrising on expectations o a central bank rate cut a oring bigretail stocks. Loss leaders included the nation's largest shippingcompany, apores AP.SN, down 4.69 percent amid plungingglobal shipping ees.