By eToro – As a result of Portugal’s economic vulnerabilities and persistently low growth, Fitch Ratings has downgraded the country’s long-term credit rating from “AA” to “AA-“.
Tue to this downgrade, it will become significantly more difficult for Portugal to secure loans and investments to finance its chronic current account and budget deficits.
The Portuguese economy is now in a very fragile position trying to balance a rapidly growing public debt against a shrinking GDP growth rate.
How does it impact on you?
The downgrading of Portugal’s long term rating is crucial to you as traders, as it signals further pressures for an already distressed Euro. Fitch’s downgrade of the country’s rating will immediately divert investments away from the Euro to healthier markets, and the herd mentality that follows will force additional downward pressure on the European currency.
Daily Forex Market Analysis provided by eToro
Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.