Pound lower on debt-rating news, PM comments

The pound weakened Monday after Moody’s Investors Service cut Barclays Bank’s (LSE: BARC; NYSE: BCS; TYO: 8642) long-term debt rating to Aa3 on the expectation that the bank will suffer further “significant” losses even though Barclays said recently that it will not need to raise any more cash or participate further in government bailout programs.

Comments from Prime Minister Gordon Brown which led some to the conclusion that he won’t take steps to support the pound also hurt the UK currency, as did expectations that the Bank of England will cut interest rates to 1 percent when its Monetary Policy Committee meets on 5 February.

In morning trade in New York the pound traded at 90.29p to the euro while it took $1.4209 to buy a pound and the yen traded at ¥127.7423 to the UK currency.

The US dollar and the yen, meanwhile, both gained on the euro, although the yen lost some gains against the greenback and the shared currency after new data showed that manufacturing activity in the United States did not contract as much as had been expected last month.

The dollar traded at $1.2829 to the euro while the yen was at ¥115.3368 to the euro and at ¥89.9050 to the US currency at around 10:30 a.m. in New York.

Story link: Pound lower on debt-rating news, PM comments