Euro Slides; Portugal Debt Downgrade

123jump.com Staff
24 Mar, 2010
New York City

European markets traded lower and the euro declined for the third week in a row as Greece faces a deadline to refinance its debt. Fitch downgraded sovereign debt rating of Portugal with negative outlook. Industrial new orders in the euro zone declined.

[R]4:00 PM Frankfurt – European markets traded lower and the euro declined for the third week in a row as Greece faces a deadline to refinance its debt. Fitch downgraded sovereign debt rating of Portugal with negative outlook. Industrial new orders in the euro zone declined.[/R]

European markets and the euro declined after the EU leaders struggled to devise a strategy to offer financial assistance to Greece.

The euro fell to $1.334 in early trading in New York after the rating agency Fitch downgraded Portugal debt.

The rating agency Fitch lowered sovereign debt rating on Portugal to AA- with “negative” outlook. Fitch highlighted rising debt and noted that weak economy may force lead to additional downgrades in the year.

France and Germany are working with the European Central Bank and the International Monetary Fund to provided assistance to Greece as early as next week. Greece is scheduled to issue new bonds to repay 10 billion euros of bonds that are maturing in the next few weeks.

The regulators and officials are not just facing financial stress from Greece but Portugal, Spain and Italy will need larger assistance as early as 2011. The estimates of total financial package involving four nations can top more than 140 billion euros according to 123jump.com estimates.

Industrial new orders for EU16 area decreased by 2.0% in January 2010, after an increase of 0.8% in December and in EU27 new orders fell by 0.2% in January, after a rose of 0.9% in December.

UK annual inflation measured at consumer price level was 3.0% in February, decreased from 3.5% in January according to the data released by the Office for National Statistics.

Europe Markets Review

In London FTSE 100 Index traded lower 25.17 or 0.44% to 5,648.46, in Paris CAC 40 Index decreased 28.47 or 0.72% to 3,924.08 and in Frankfurt DAX index traded lower 28.64 or 0.48% to 5,988.63. In Zurich trading SMI decreased 20.49 or 0.30% to 6,856.67.

Portugal PS-20 Index dropped 1.6% and the ASE Index of Greece traded lower 0.7%.