The credit agency, Moody’s, has decided to cut the credit ratings of six countries within the Eurozone: Italy, Spain, Portugal, Malta, Slovakia and Slovenia. In addition, it also warned of a possible downgrade for three countries with AAA credit ratings: Austria, France and the United Kingdom. The cuts and downgrades stem from how vulnerable these countries are to being effected by the Eurozone credit crisis.
Moody’s downgrade and warning announcement caused the Euro to slip against the US Dollar. In less than 10 hours, the Euro fell 136 PIPs. Take a look at the chart below:
News events such as credit rating downgrades can create momentum in the Forex market. Educated Forex traders are able to know what to look for, how to prepare and how to react to these market movements.
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