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According to Reuters, sterling was down to $1.4936 from the peak of $1.5197 it reached yesterday following news that the UK trade deficit is now at its widest since August 2008.
It was also hit by comments from Fitch Ratings, which said the UK - along with France and Spain - is one of the AAA-sovereign rated countries where the needs for fiscal adjustment is greatest.
Senior analyst at Caxton FX Duncan Higgins said the fact that the UK's trade deficit now stands at around £8 billion has shocked the markets.
"It had been hoped that the increased competitiveness of UK exports would have supported a rebalancing of the deficit," he remarked, adding that the comments from Fitch "consequently added to sterling's downward spiral".
Posted by Clive Arneil
