Home > Resource Hub > Daily Market News > Spanish downgrade bad for EUR

Spanish downgrade bad for EUR

Spanish downgrade bad for EUR

The euro slipped to $1.3160 against the US dollar this morning, marking a 1¢ loss from yesterday. GBP/EUR fell to £1.2285, reaching a low last seen in June 2010. The euro looks set to remain on the defensive ahead of this morning’s Italian bond auction. The government is looking to issue 4-year, 5-year, 7-year and 10-year bonds and yields have already risen ahead of the auction.

S&P cut Spain’s sovereign credit rating for the second time this year, citing concerns over support for the banking system as the economy continues to contract. Spain’s rating was reduced by two notches from A to BBB+ with a negative outlook remaining. The trigger for a further downgrade would be the debt-to-GDP ratio rising through 80%. At present, the Spanish government expects the ratio to peak at 79% in 2012, but weaker growth or a larger than expected bank bailout could easily push it through the 90% level. 10-year bond yields jumped from 5.85% to just over 6% this morning but have now pushed back below that level.

Currency UK will offer you the best exchange rates available and ensure that you subsequent international transfers are handled as quickly and as efficiently as possible.

Do you want to earn some extra money? Then you can profit from our affiliate program by referring a company or friend that may benefit from our services and earn a commission in return. Contact us now on +44 (0)20 7738 0777 or click here.

Share this case study
Set yourself up in minutes, make payments the same day: it’s free, easy and without obligation.