During the trading session on February 25, the British pound dropped sharply 1.65% against the single currency to €1.137, the lowest level for the last 1.5 years.
The pound sterling is losing its positions against the U.S. dollar as well. At the beginning of the Asian session, the pound surged to the minimum of summer 2010 - $1.507, The Financial Times reports. The quotes edged up a little at the beginning of the European session. As of 18:00 (GMT+4), the pound was trading at $1.512.
The UK’s government bond rating downgrade and Italy’s elections are pushing the pound down. The UK’s bonds lost their highest credit rating on February 23 - Moody’s changed “AAA” rating by one notch to “Aa1”. In its rationale the agency said that “subdued” growth prospects and “high and rising debt burden” were weighing on the economy.
Besides, optimistic outlook on Italy’s elections supports the euro. As Reuters states, the experts believe that elections will help to create an integrated government which will be able to cope with the European crisis.
