The pound weakened against the dollar and euro after Fitch Ratings said the U.K. risks losing its top investment grade. Sterling dropped against all but one of its 16 major counterparts after Fitch late yesterday changed its rating outlook on Britain to negative, citing a weak economic recovery, high debt levels and threats from the euro-region crisis. Switzerland’s franc strengthened for the first time in four days against the euro after the central bank raised its growth forecast at a policy meeting. The yen rose from an 11-month low against the greenback. The Fitch statement “underlines concerns people had with the U.K.,� said Ulrich Leuchtmann, head of currency strategy at Commerzbank AG in Frankfurt. “The combination of monetary policy, which is accepting higher inflation rates than the target and a fiscal policy that might come to limit growth, is certainly bad for a currency.� The pound declined 0.3 percent to 83.36 pence per euro at 11:17 a.m. London time. It slipped 0.2 percent to $1.5652, after dropping as much as 0.3 percent earlier. Against the dollar the euro was little changed at $1.3046, while the yen strengthened 0.4 percent to 83.44, after depreciating to 84.18, the weakest since April 13. The Swiss franc appreciated 0.2 percent to 1.21070 per euro and rose 0.3 percent to 92.79 centimes per dollar. To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net. To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net.

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