Daily currency report

Standard & Poors, the US ratings agency, said that they did not foresee any change to Italy's sovereign rating following the recapitalisation of most of the major banks with a € 20 billion financing package. The outlook remains "stable", although this really means unchanged from very low rating, BBB-. Standard & Poors record for accurately foreseeing difficulties and credit events is questionable. For them to ignore the fact that so many of the country's major banks are at such critically low levels of liquidity and not register that as a situation which should at the very least a prompt towards "negative watch" is beyond logic. These issues will come home to roost in the weeks and months ahead, creating more problems for Italy and possibly knock-on effects for the rest of Europe. Sterling The previous Governor of the Bank of England, Mervyn King, said that while a total detachment from EU would present challenges, it would also enable UK to press ahead with other trade deals. Mervyn King gave an interview on UK Radio last Monday. His opinion was that the UK should make a complete break from EU, not seeking ongoing or transitional relationship with the European trading zone. He...

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