(IT) MOODY’S DOWNGRADES ITALY’S SOVEREIGN RATING TWO NOTCHES TO BAA2 FROM A3, MAINTAINS NEGATIVE OUTLOOK
The decision to downgrade Italy’s rating reflects the following key factors:
How to interpret these headlines:
By the looks of it, I believe there are more bad news on the horizon for the Euro, especially considering that Spain is also likely to be downgraded (yet again!). European Economic Outlook certainly has deteriorated in the last few months, and with the current global economy struggling, the Euro is likely to remain under pressure until either the US Federal Reserve launches another round of quantitative easing, or significant improvements take place in the troubling member states, namely Spain, Greece, and now Italy.
I would still maintain a bearish outlook on the Euro as I believe the overall market to be on a cautious tone with the Euro. However, I would definitely wait for a pull-back before jumping into another SELL trade as some consolidation could take place before EURUSD drops below the 1.2000 level.
European Economic Outlook Dims With Italy And Greece Facing Increased Scrutiny
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