Home Moody’s Reviews Spain for Downgrade
Forex News Today: Daily Trading News

Moody’s Reviews Spain for Downgrade

Credit rating agency Moody’s announced that it’s putting Spain under review for a downgrade  – Spanish bonds might lose their AA1 rating, which is one level under the highest. This is taking its toll on the Euro.

Spanish bond yields for 10 year notes opened higher, at 5.56%, already very close to the peak reached at the height of the Irish crisis. While the bond buying efforts of the ECB focused on Portugal, the “next domino”, Spanish bonds ticked higher every day.

The Spanish government says it doesn’t need aid. The current EU / IMF bailout fund doesn’t have the sufficient capacity for bailing out Spain. Here’s what Moody’s thinks:

“Moody’s does not believe that Spain’s solvency is under threat and in its base case assumptions does not expect the Spanish government to have to ask for EFSF liquidity support,” Moody’s lead analyst on Spain Kathrin Muehlbronner said in a statement.

OK, they’re not in danger of insolvency, but the fact that they say it, isn’t too good.

While there was lots of optimism in Europe at the beginning of the week, it now makes way for fear.

EUR/USD currently trades at 1.3320. For technical levels, see the EUR/USD forecast.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free..

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.