Bloomberg News

Euro Drops on Speculation France’s AAA Rating May Be Lowered

January 12, 2012

Jan. 11 (Bloomberg) -- The euro weakened for the first time in three days against the dollar on speculation that France’s credit rating may be cut.

“Over the past hour, there has been some renewed speculation that France’s AAA rating might be lowered later today by Standard & Poor’s,” which may be weighing on the euro, said Michael Derks, chief strategist at FXPro Financial Services Ltd. in London.

Franck Louvrier, a spokesman for French President Nicolas Sarkozy, said he had “no information” and declined to comment further on ratings companies’ actions.

The euro slid 0.8 percent to $1.2676 at 3:01 p.m. London time. The 17-nation currency declined 0.6 percent to 97.62 yen.

S&P placed the ratings of 15 euro nations, including AAA rated Germany and France, on review for possible downgrades on Dec. 5, saying it may cut the French grade by as many as two steps. Moody’s Investors Service said Dec. 12 it will review the ratings of European Union countries after a summit on Dec. 9 in Brussels failed to produce “decisive policy measures” to end the region’s debt turmoil.

--Editors: Daniel Tilles, Paul Dobson

To contact the reporters on this story: Emma Charlton in London at echarlton1@bloomberg.net; David Goodman in London at dgoodman28@bloomberg.net.

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net.


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