By: Barbara Zigah
The single currency Euro continued its decline for the third consecutive day following the news that Fitch Ratings Agency had downgraded the debt rating of Greece from A- to BBB+ with the possibility of further downgrades in the future. This is the first time in more than a decade that any ratings agency has given Greece anything other than an A grade, and the agency specifically mentioned fiscal deterioration as one of the factors in the downgrade. Likewise, Standard & Poor’s recently reported that banks in Greece were facing the highest risk in all of Western Europe, and has placed them, along with Portugal, on their negative watch list.
The single currency Euro continued its decline for the third consecutive day following the news that Fitch Ratings Agency had downgraded the debt rating of Greece from A- to BBB+ with the possibility of further downgrades in the future. This is the first time in more than a decade that any ratings agency has given Greece anything other than an A grade, and the agency specifically mentioned fiscal deterioration as one of the factors in the downgrade. Likewise, Standard & Poor’s recently reported that banks in Greece were facing the highest risk in all of Western Europe, and has placed them, along with Portugal, on their negative watch list.
As reported at 2:27 pm (JST) in Tokyo, the Euro slipped against the U.S. Dollar to its lowest point in nearly 5 weeks, trading at $1.4665, off from $1.4698 in New York late yesterday. Versus the Japanese Yen, the Euro fell to 129.66 Yen, off of yesterday’s late trade of 129.87 Yen, in New York.
One forex dealer in Japan commented that traders may naturally move to decrease their exposure in the Euro, because the recent downgrades and negative watch warnings suggest that other nations in the Euro zone may also be affected as a result of underperformance.