Euro shrugs off Portugal downgrade and remains firm against dollar, sterling and swissy today. Standard and Poors downgraded credit rating for Portugal two notches from A- to BBB after resignation of Prime Minister Socrates, following rejection of the new austerity measures on Wednesday by the parliament. The rating agency noted that " increased political uncertainty could hurt market confidence and heighten Portugal's refinancing risk" and it will take "at least two months to both hold elections and to form a new government". The rating agency also warned the another one notch downgrade as early as next week depending on the final outcome of EU summit on ESM and the likelihood Portuguese government bondholders become subject to a restructuring. This also followed Fitch's two notch downgrade of Portugal yesterday.
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