The Euro heads south after this "bread & butter" European company gets downgraded!
It's like a reoccurring nightmare lately for Europe!
France's largest bank, BNP Paribas just got downgraded by Fitch to AA-. Fitch sited a "deterioration of the company's asset quality".
Then to add "insult to injury", S&P said that Spanish lenders will face "difficult years" because of the nation's slow growth. They further explained that Spain's growth would not be the formerly projected 1% but rather 0.7% a year through 2016! They claim this will be due to "mounting credit losses and a substantial strain on revenue generation".
So if you were in doubt about the euro's downtrend, I think you can resolve those doubts now in light of all of this latest news! (Click on the chart to enlarge it).
In fact, it wouldn't surprise me if the Fed has to change its tone a bit and "hint" about the possibility of rate hikes to come in the months ahead. Their time may be about to run out on 1/4% interest rates.
All of this will have a tendency to be more "dollar bullish" than "euro bullish" if nothing else because of the dollar's ability to act as a haven during tough times.
Therefore, I believe that this will take the EUR/USD back below 1.20 and then some...and it will also take EUR/JPY down below the 110's again too.
In fact, I'll be looking for just the right time to get short EUR/JPY in my Currency Cross Trader newsletter service very soon. It typically falls even better that EUR/USD.
I hope you'll be joining us as we get set up to profit from the next round of short sells.I'll be giving out the exact entries, stops, limits and even how many lots to trade to my subscribers in the days to weeks ahead.
Editor, The Currency Cross Trader