Pound higher as euro slides on ECB, France credit rating

Sterling was set for its biggest weekly gain versus the euro
since April after the European Central Bank (ECB) cut rates and
France’s sovereign credit rating was downgraded.

EUR/GBP slid to 0.8301 on Thursday (November 7th), the strongest
level since January 17th, before easing to 0.8338. The pound has
risen 1.7 per cent against the euro this week.

The euro plunged after the ECB chose to cut its base interest
rate to 0.25 per cent in a bid to tackle looming deflation in the
bloc.

ECB president Mario Draghi said rates would remain low until the
economy improves, and warned of “a prolonged period of low
inflation”.

Against the dollar the single currency tumbled as much as 1.6
per cent following the announcement. EUR/USD later pared losses to
trade at 1.3415 on Friday morning.

The euro also came under pressure after Standard and Poor’s
downgraded France’s credit rating to AA from AA+.

Elsewhere, the Czech koruna tumbled by close to five per cent
against the euro, following the move by the country’s central bank
to begin unlimited koruna sales to ease monetary policy and
maintain the
exchange rate near 27 per euro