As Ryan reported in his American posting’s, Moody’s last night announced they were downgrading UK debt from Aaa to Aa1, the first time such a move has been made since 1978.
The Pound understandably plunged in late trading with GBPUSD ending down at 1.5162, EURGBP up at 0.8698, GBPCHF 1.4090, GBPJPY 141.61 and GBPAUD at 1.4689
Given all the recent talk of a downgrade, and the rumour last week that S&P would be first to do so, there is an argument to say that much of the selling had been factored in already and that the move last night was very much one of a knee-jerk reaction. However, the fact that it occurred so late in trading means that other time zones have yet to respond.
We shall know more tomorrow night in Asia and on Monday when Europe opens up.
I will post some further thoughts in due course, but in the meantime here’s the Moody’s announcement and what some of the UK press are saying so far.
http://www.bbc.co.uk/news/business-21554311
http://www.guardian.co.uk/business/2013/feb/22/uk-credit-rating-downgraded-moodys
