Ireland’s soverign rating has been dropped
Ireland's soverign rating has been dropped from to BAA3 from BAA1, pushing the euro lower and adding to renewed pressure on Euroland's weaker countries. The downgrade came a a bad time just after the government said on Thursday it had passed a review of its economic progress by creditors and ratings agency Fitch upgraded its outlook.
This is after Greek borrowing costs rose to new highs after Germany said that Athens may have to restructure its huge public debt, turning up the heat on fellow strugglers Ireland and Portugal.
It said the country may need to take further austerity measures to meet its fiscal goals and that its financial position may suffer as a result of rises in ECB interest rates. It added that upward pressures could also develop on the rating and that Ireland's long-term potential growth prospects remain higher than those of many other advanced nations.
The Euro dropped after the news but is recovering back towards the 1.4475 level. Considering the news from Greece yesterday, China inflation and the continuing woes of Euroland the Euro is continually moving upwards on bad market news which is a serious concern.
