Las Cruces, NM (MercadAnalytic). Thursday morning’s market opening is quickly turning into and interesting reminder of the interrelationship of the USD with the EURO. The S&P’s rating agency downgraded Spanish credit to “near junk, shortly after market closing. The immediate impact of today’s announcement was the U.S. Dollar’s sudden jump from 80.00 to 80.26.
S&P provides the following reasons for the downgrade:
• The deepening economic recession is limiting the Spanish government's
policy options.
• Rising unemployment and spending constraints are likely to intensify
social discontent and contribute to friction between Spain's central and
regional governments.
• Doubts over some eurozone governments' commitment to mutualizing the
costs of Spain's bank recapitalization are, in our view, a destabilizing
factor for the country's credit outlook.
• We are therefore lowering our long- and short-term sovereign credit
ratings on Spain to 'BBB-/A-3' from 'BBB+/A-2'.
• The negative outlook on the long-term rating reflects our view of the
significant risks to Spain's economic growth and budgetary performance,
and the lack of a clear direction in eurozone policy.
Stay tuned. This is certainly turning into an interesting start.
No comments:
Post a Comment