Moody's warns it may cut AAA-rating for UK and France
Moody's move was less aggressive than rival agency Standard & Poor's, but its action puts London's prized top credit rating in jeopardy for the first time.
It said it was worried about Europe's ability to undertake the reforms needed to address the crisis and the amount of funds available to fight it. It also said the region's weak economy could undermine austerity drives by governments to fix their finances.
The euro and sterling fell after the announcement, with pound falling 0.4 percent to $1.5703 and the single currency dipping 0.3 percent to $1.3154. European and U.S. equity index futures were also lower.