Pound weakens slightly against US dollar in quiet trading

The pound weakened against the US dollar yesterday by 0.28 cents (0.18%), closing the day at $1.5906.

• In a light day’s trading because of the public holiday in both the US and UK, sterling weakened slightly against the greenback as some investors booked profits from last week’s healthy rise.
  
• In early trading on Friday, the pound continued its rise against the dollar after concerns surrounding the US’s triple-A sovereign credit rating surfaced. On Thursday, rating agency Standard & Poor’s downgraded its UK outlook from “stable” to “negative”. This sparked broad selling of American stocks and bonds on Friday as fears that record US deficits could lead to a similar downgrade.
  
• Another ratings agency, Moody’s, added to the downward pressure on the greenback after it admitted that although it was comfortable with its triple-A sovereign rating for the US at the moment, it was not guaranteed forever.
  
• In trading so far today, the pound has continued its slide against the dollar as investors await US Treasury auctions to test the strength of market appetite for dollar assets.
  
• There are no major announcements due in the UK today, whilst in the US CB Consumer Confidence data is released at 15.00 BST.