Pound falls to lowest against euro in two years

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The pound has continued its recent downward trend by marking up the biggest one day fall against the euro for over two years.

Last Friday the sterling fell by 1.8% against the single currency from its level on the previous day, which represents the largest percentage decline since May 2010.

The data also marks the lowest exchange level between sterling and the euro since October 2011, with one pound only fetching 1.1473 euros.

There are a number of reasons that the fall is being attributed to, including fears about the possible marking down of the UK's current highly valued AAA credit rating.

Recent warnings from credit rating agency Fitch have re-ignited fears that the UK could lose its top rated status if the Government does not succeed in its plans to substantially reduce the sovereign debt.

The overall state of the UK economy continues to worry the markets after the recent announcement that there was a contraction of 0.3% in the final quarter of 2012, and concerns that another bad set of figures would show a triple dip recession are definitely having their effects felt when it comes to confidence in the currency.

Further improvements in the outlook for the eurozone, with hopes being raised for the end of the crisis now being in sight, have also been blamed for contributing to sterling’s fall.

With new figures showing that, although the eurozone's manufacturing sector had continued to contracted, the rate of decline had in fact slowed down, giving rise to new enthusiasm for a boost in confidence in the euro and a hope that the worst might now be over.

The euro also recorded rises against a basket of overseas currencies, including hitting a 14-month high against the dollar and an even more impressive 33-month level against the yen.

The volatility of the international currency markets highlights the need to used an experienced currency exchange specialist for any overseas financial transaction.

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Pound falls to lowest against euro in two years

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