Mounting speculation that a leading credit agency is to imminently downgrade the ratings of a number of eurozone countries drove global markets sharply lower today and sent the euro spinning down to a 17-month low.
The euro nose-dived on speculation that Standard & Poor's was finally going to deliver the downgrades it had threatened for much of the 17-nation eurozone just over a month ago over concerns of Europe's ability to get a grip on its debt crisis.
In the run-up to the last meeting of EU leaders on December 9, S&P said it was putting 15 of the eurozone's nations on notice for a downgrade and there has been particular concern that France's rating would be cut.
A downgrade of the eurozone's triple A nations, such as France, could have far-reaching implications, potentially complicating the ability of Europe's bailout fund, the European Financial Stability Facility, or EFSF, to provide support to struggling countries. France is a major contributor to the EFSF.
Rumours of the downgrades provide further evidence that investors in the markets remain jittery despite some positive signs over Europe's debt crisis this week.
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