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April 15, 2021

Fitch downgraded five euro countries

Fitch Ratings downgraded Italy, Spain, Belgium, Cyprus and Slovenia’s sovereign debt ratings Friday as it wrapped up a review of the region, Wall Street Journal informs. Fitch affirmed its rating on Ireland. All six countries ratings carry a negative outlook, which means there is a slightly greater-than-50 per cent chance they are downgraded in the next two years. The euro briefly tumbled on the news, which came mere moments after the common currency climbed above USD1.32 for the first time since Dec. 31. However, the euro clawed back all of those losses already. It was most recently trading at USD1.3204. The knee-jerk reaction in the currency market was likely short-lived because Fitch’s moves weren’t considered as severe as the ones taken by Standard & Poor’s two weeks ago.

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