The Euro dropped for a fourth straight day today after the Greek credit rating was downgraded once again. This has triggered risk aversion in the Eurozone that caused them to avoid holding long positions over the Euro. The credit rating agency Standard and Poor’s has cut Greece’s rating to B from its previous BB-, bringing it closer into the junk region as the concerns of Debt Restructuring are appearing to be dominating the market.
The Greek prime-minister Andreas Papandreou has asked the outside public to leave Greece alone in order to handle its economic debt position and avoid creating more pressure for the debt burden country. With the 2-year bonds in Greece being very close to 25%, the cost of borrowing is very high for Greece and it of high level of doubt whether investors in the Greek debt can expect to get a full return on their investment. Despite speculations of Greece leaving the Eurozone and returning to the Drachma the Prime-Minister states there is no way this could happen.
The EURUSD pair today was traded as high as 1.4406 and has dropped as low as 1.4253 making a 0.1% decline. The pair is currently traded at 1.4306, having made some recovery from that low , and is of great interest to see if the Euro will further sink or recover from the hits it has suffered during the last 4 sessions.