KW: Pound recovers after being hit by credit rating cut
Sterling recovered well this morning (February 25th) after slipping to a two-and-a-half year low against the dollar and its weakest value against the euro for 16 months.
This was a result of the downgrade of the UK's credit rating by Moody's from the top level AAA rating, down to Aa1.
Although a cut had been anticipated for some time, it caused the pound to drop significantly in forex markets.
However, it recovered well and was down just 0.13 per cent at $1.5144 as of 11:30 GMT, having dropped as low as $1.5073.
Sterling's fall against the European currency was more sustained, losing 0.77 per cent to €1.1407, though still up from this morning's low of €1.1398.
The pound had already come under serious pressure last week with the release of minutes from a Bank of England meeting showing chancellor Sir Mervyn King supports further quantitative easing. Although he was outvoted on this occasion, it is expected the measures will be implemented in the near future.
