Moody's slashed Greece's government bonds rating by four notches to junk territory. The cut puts Greece's rating to Ba1, which is the highest junk-level rating. The ratings agency said there was considerable uncertainty surrounding the timing and impact of support measures on the country's economic growth.

The Euro fell in the wake of the news, but cutting only a small portion of its gains for the session. There are several reasons for the subdued reaction as Moody's is not the first rating agency to take away the country's investment grade status. The outlook for the country is stable. Greece having secured an EU/IMF package of emergency loans does not need to come to financial markets in order to borrow to fund its budget deficit. Finally, the ECB has said that it would accept Greece bonds as collateral for new loans no matter what rating is assigned.

The news did cool the sense of risk appetite in US equities as stock indexes gave up their loftier gains seen earlier in the session and oil prices pared their gains as well. The USD/JPY slid sharply following the news, falling below its opening level, while the USD/CAD moved back to its open near 1.03 following its test of 1.0222.