Sterling hits low against dollar

Sterling has fallen to its lowest trading rate against the dollar since May 2009.

Analysts suspect that investors have been prompted to reduce their exposure to risky assets close to the euro zone following the continued worry over Greece's currency rating.

It is also thought that the euro's troubles have reminded investors that its close neighbour, the sterling, is also on shaky ground.

Ned Rumpeltin, a currency strategist at Nomura in London, told Reuters: "While the focus has been on the euro zone and the problems it has been having, the market in the back of its mind knows that the same dark clouds hang over the UK."

Following the Bank of England's announcement that the UK's £200 billion quantitative easing program would not be extended, investors are awaiting further details from the governor Mervyn King which may once again reassure them of the safety of the currency.

Sterling reached a low at around midday today (February 8th) when one pound bought $1.555.

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Posted by Sarah Pitton