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Glenn Uniacke, head of options at the forex specialists Moneycorp, commented:
"Right on cue, the Pound fell more than a cent against the Euro when the markets opened on Monday morning.
"But as the dust settles, many are starting to ask themselves what the fuss was about.
"For months the only question had been when, not if, the downgrade happened.
"It had been so heavily priced in that now it finally has, it may serve as a "reversal indicator" - perversely easing the pressure on the Pound as the uncertainty ends.
"The truth is the downgrade is a symptom, rather than the cause, of the UK's problems.
"The government had relied on the market believing it could simultaneously tackle its debt problem and engineer economic growth despite the global downturn.
"The market's faith in the Chancellor's ability to pull off such a tough juggling act has been badly knocked, and as confidence in the Eurozone returns, by contrast investors are having ever more doubts about the UK.
"The bandwagon effect is a powerful one, and Sterling's decline against the Euro is likely to continue. If the Euro's rally continues as well, the Pound risks sliding ever closer to parity with the single currency."
