Pound weaker on bank debt-rating cut

Pound weaker on bank debt-rating cut

Story link: Pound weaker on bank debt-rating cut

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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.

Moody’s cited expectations that Barclays will incur “significant� further losses, making the cut even after the UK bank said recently that it will not need further government bailouts and that it will not have to raise more capital.

Declines for the UK currency also came after Prime Minister Gordon Brown made remarks leading to the conclusion that he won’t take steps to support the pound and on anticipation that the Bank of England will cut interest rates to 1 percent when its Monetary Policy Committee meets Thursday.

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.

Meanwhile, the US dollar and the yen both gained on the euro, but the yen gave back 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.