Published by Jamie JemmesonThe pound was down in foreign exchange trading this morning (March 15th) after a report from Moody's highlighted the fragility of the UK's AAA sovereign debt rating.In the report, the ratings agency warns that the UK government needs to take swift and resolute action to bring public debts under control, as political wrangling over when such measures will be introduced is dissolving investor confidence and creating further instability."The question here is less when fiscal retrenchment ought to start, but rather how credible it is that sufficient retrenchment will eventually take place," the report warned.Following the announcement, the pound lost ground against its major competitors amid a fresh round of forex hedging, with traders now looking ahead to a budget statement due to be made by Alistair Darling later this month. It will be hoped that the chancellor will use his last opportunity to direct monetary policy before the next election to deliver the type of action plan ratings agencies are looking for.For more information on foreign exchange treasury services and risk management, visit our Corporate FX site