Currency Exchange UK

 

Sterling Extends Losses

Sterling Extends Losses

Tuesday morning and in early trade in the London session, sterling extends losses after some worrying comments from rating agency Fitch.

The pound reached a one-week low against the US dollar, falling to $1.4947 after Fitch said that the UK’s sovereign credit profile had ‘deteriorated’.

Among the larger EU economies, Fitch said that Britain was in a similar situation with France and Spain and that all three were in danger of losing their precious AAA rating.  However, it was said that Britain was still “within tolerance” of its rating.

Meanwhile, trade deficit grew to £7.987 billion for the UK – far higher than what had been predicted by expert analysts, who had put the figure at £7 billion.  Another factor to affect the pound were poor housing market data – UK house prices showed a fall.

For the euro, there was a rise of 0.3% against the pound, to 90.75 pence.  Lately, the euro has been under immense scrutiny, not least because of the growing anger surrounding speculative trading on the foreign exchange market. 

Politicians in Greece – the country most blamed for the euro’s recent poor performance – and the US and France have already launched an attack on speculators and hedge funds, accusing them of over-betting against the euro and for a Greek default in order to gain profit.