Fitch Ratings agency put the credit ratings of four of the largest Australian banks on “rating watch negative ” on Monday, causing the Australian dollar to weaken.
The four Australian banks which had their ratings out at risk of a downgrade are Australia’s four largest banks – Commonwealth Bank of Australia, National Australia Bank Ltd, Westpac Banking Corp and Australia and New Zealand Banking Group Ltd.
Fitch Ratings said these four lending institutions continue to have a weaker funding profile than similarly-rated peers and placed the long-term issuer default ratings and viability ratings on rating watch negative.
Fitch said that any downgrades of the four major Australian banks’ ratings are most likely to be limited to a single notch and that those banks already have a very high rating. ANZ has a long-term credit rating of AA-, while National Australia Bank, Westpac and Commonwealth Bank have a AA rating.
The aussie retreated from a three-month high hit last week against the yen and the dollar. The Aussie fell 1 percent to 80.85 yen since the open of the Sidney trading session until early European trading on Monday. AUDUSD dropped to 1.0544.