The Pound fell versus most of 16 main traded currencies after one of the most respected financial institutions in the world affirmed that the credit situation in the U.K. remain as one of the most delicate among the wealthy nations, decreasing attractiveness for the British currency.
Attractiveness for U.K. assets and currency suffered a negative impact today as Fitch Ratings affirmed that the situation in the Great Britain is the least optimistic among countries rated by the Fitch Group as AAA, pointing out specially the fact that the country needs a large budget adjustment to achieve stabilization. Standard & Poor’s, another of the most influential financial groups in the world, also stressed on the fact that the U.K. monetary system is facing complications, and a downgrade on U.K. investment rating would not be a surprise, decreasing even further attractiveness among traders to inject capital in the British Isles, which have been suffering consecutive negative economic events during the past months.
Analysts affirm that if the U.K. credit rating would actually suffer a downgrade, it would influence severely the pound’s movements, as the psychological consequences would be extended to a much deeper level, shunning traders not only from the U.K.’s currency options, but also stocks and general investments in the country.
GBP/USD traded at 1.6692 as of 10:38 GMT from as high as 1.6843 yesterday. EUR/GBP rose to 0.8989 from 0.8921 in the intraday.
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