Euro is struggling against the US dollar today, heading lower as the economic situation in the eurozone raises questions. Euro is also barely holding its own against the UK pound, struggling as it moves between gains and losses today. Between the ECB rate cut yesterday and the downgrade to France’s credit rating, there is a lot weighing on the 17-nation currency right now.
Yesterday, the European Central Bank surprised nearly everyone by cutting its benchmark rate. While there was talk of a rate cut, the timing was a surprise, since many expected the ECB to wait at least another month. The rate cut immediately weakened the euro against many of its counterparts.
Today, though, there is extra pressure on the euro as France’s credit rating is downgraded. S&P cut France’s rating to AA from AA+. This represents the second time that France has seen a credit rating downgrade in less than two years. The ratings agency doesn’t feel as though France is taking sufficient steps to shore up its budget and financial situation.
With the contrast between the improving US economy, and the languishing eurozone economy, it’s not much of a surprise that the euro is struggling.
At 15:19 GMT EUR/USD down to 1.3335 from the open at 1.3418. EUR/GBP is down to 0.8345 from the open at 0.8346. EUR/JPY is up to 131.9860 from the open at 131.5350.
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