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GBP declines against the euro

GBP declines against the euro

Sterling eased against the euro on Wednesday and is likely to stay subdued on weak economic data that may keep alive expectations of more monetary easing by the Bank of England in the near term. The euro was supported by lingering hopes that the European Central Bank could take bold action to tackle the euro zone debt crisis this week.

GBP weakened against the euro on reported month-end demand for the single currency and as investors hope for bold action from the ECB later this week.GBP/EUR fell to a low of €1.2709 during the day while GBP/USD also lost ground dipping below the $1.57 level. Sterling was flat against the dollar, having lost ground earlier in the week.

Moody’s confirmed the UK’s AAA rating in its regular review this morning, although having lowered its forecasts to see 0.4% GDP growth in 2012 and 1.8% in 2013, it kept its negative outlook on the economy, reflecting its view that it will take longer for the economy to return to trend growth.

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