Two notch downgrade for Ireland

Friday, 15 April 2011 10:53

Ireland was downgraded by Moody's Investor Services by two notches to Baa3 Baa1.  EUR/USD dipped down by 17 pips from 1.4468 to 1.4450 in the space of less than 5 minutes.  EUR/USD is currently trading at 1.4492, gaining strength from its opening level.

EUR/GBP dropped to 0.8851 from 0.8860, currently trading 0.8855; keeping a steady price with little movement at the moment.

Despite the downgrade, Ireland tarries in the investment-grade category mirroring the country's economy's nonstop competitiveness.  The negative news on the government bonds by Moody's created dubiety on the country's outlook.  The news crippled the confidence of  the Irish government's financial energy and created uncertainty by the solvency test necessary by the ESM (European Stabilization Mechanism).