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Greek credit downgrade puts further pressure on the EURO

Written by Sam Coxhead on May 10th, 2011.      0 comments

7:40 AM (NZT) Credit agency Standard and Poors downgraded Greek debt further into junk status with a rating reduction to B, the same as Belarus, and the lowest in Europe. It also maintains its negative watch on the new current rating. Greece's ability to pay upcoming maturities and raise money in the open market causing the move.Fitch and Moody's remain unchanged at this stage.

Portugal is also on the S&P radar, getting a warning that not meeting the bailout requirements of the EU/IMF programme would cause another downgrade. The EURO suffered more selling on the news reaching a low of 1.4258 against the US dollar, before bouncing 100pts. This news has hit most European debt , with the yeild on Portugal, Ireland,Italy,Spain and begium joing Greece's in moving higher.

As can be seen from below the USD is on the lows of the day and the Australasian currencies sit right on their highs. Oil and otther commodities are strong, stocks up and US yield lower, which is inline with a weaker US dollar. The Euro-zone debt issue is obviously causing uncertainty in the market, but after last week's rout there will possibly be a little more grind appreciation of risk assets to come.

    Last 24 hours trade
  Current level Low  High
NZD/USD 0.7949 0.7888 0.7949
AUD/USD 1.0794 1.0697 1.0794
NZD/AUD 0.7367 0.7367 0.7390
AUD/NZD 1.3574 1.3532 1.3574
NZD/GBP 0.4848 0.4829 0.4848
NZD/EUR 0.5540 0.5499 0.5542
NZD/JPY 63.79 63.63 64.07
NZD/CAD 0.7664 0.7611 0.7664