Business

Pound sees biggest one-day fall against euro since 2010

  • 1 February 2013
  • From the section Business
Sterling coins and notes
The pound has fallen for a number of reasons

The pound has continued to weaken against the euro, seeing its biggest one-day fall in almost three years, on continuing signs that the worst may be over for the eurozone economy.

At one point on Friday, sterling fell 1.8% against the single currency from a day earlier, the largest percentage fall recorded since May 2010.

This meant one pound was worth 1.1473 euros, the lowest since October 2011.

The pound has also been weakened by fears about the UK's AAA credit rating.

This follows after credit rating agency Fitch warned last month that the UK could lose the top rating if the government does not reduce its sovereign debt.

Continuing concerns about the UK economy, which contracted by 0.3% in the final quarter of 2012, have also hit sterling.

Eurozone improvements

At the same time, the eurozone economy is showing more signs of slow recovery, helping to boost confidence in the euro.

Data on Friday showed that while contraction in the eurozone's manufacturing sector had continued in January, the rate of decline had slowed.

In later Friday exchanges, the pound recovered some ground against the euro to stand at 1.15000 euros, 1.5% lower than a day earlier.

The euro also rose strongly against the dollar, hitting a 14-month high, and a 33-month peak against Japan's yen.

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