Standard & Poor's on Monday downgraded the European Financial Stability Facility (EFSF) from AAA to AA+, following last week's lowering of the sovereign debt of nine Eurozone countries, including France and Austria.

The outlook for the EFSF shifted from watch negative to developing.

In the wake of the announcement, the Euro fell Monday by 1.32 percent to 1.2643, compared to the U.S. dollar. 

The move was widely expected, as Standard & Poor's had warned in December that changes to the countries that guaranteed the EFSF would impact its rating.

Following the lowering of the ratings on France and Austria, the rated long-term debt instruments already issued by the EFSF are no longer fully supported by guarantees from the EFSF guarantor members rated AAA, S&P said in a statement.

Additional credit enhancements could return the EFSF to a AAA rating, S&P said, but further downgrades could occur if the creditworthiness of the EFSF's members continued to deteriorate in the next two years. If credit enchancements are unlikely to appear, the outlook on the EFSF would likely be changed to negative.