In a new blow for the single 16-nation currency, the budgetary imbalances and rising fiscal burdens are haunting the nation in the wake of the worst financial crisis since the Great Depression.
As markets ponder upon the new revelations regarding Greece, and the altered French position to back Germany on an IMF tailored solution, the new problem has arrived now from another debt-ridden nation, Portugal.
Fitch Ratings announced in a statement today from London that it lowered Portugal's credit rating by a further step to AA- citing the nation's deteriorating public finances. Fitch said in the statement that the outlook remains negative on the nation indicating possibility for further downgrades as the conditions continue to worsen in Portugal.
On the back of rising debt worries and fiscal fears which are to hinder the euro area's recovery and batter its competitiveness, the euro continued its bearish movement extending the heading south. The euro hit a fresh new low on the Portugal news at 1.3341 versus the dollar the weakest in 10 months; and slumped versus sterling to hit a fresh session low of 0.8908 and hit a fresh record low versus the Swiss France at 1.4230 areas.