In These New Times

It’s working! What a great idea having your own rating agencies- one minute you can triple AAA rate a junk CDO, the next you can trash competing currencies. You can even maintain UK government bonds at AAA rating! The battle for Europe is heating up- look out for retaliation soon.

The Street

28th April, 2010

The dollar surged to a new 11-month peak against a basket of its major counterparts overnight, broadly boosted by mounting sovereign credit concerns in Europe.

Yesterday, Standard & Poor’s ratings agency downgraded Greece’s government debt to junk status amid mounting concerns about its ability to finance its soaring debt.

Concerns about contagion to other eurozone nations and the soaring cost of financing government debt prompted S&P to downgrade Portugal as well yesterday.

Uncertainty over the amount and timing of a financialaid package for Athens has kept investors wary of holding Greek assets, and this was clearly illustrated in the rise in the premium investors are charging the Greek government to borrow. The resulting drop in investors’ appetite for risk saw traditional safe-haven assets like the greenback, the Japanese yen and gold all soar as higher-yielding and riskier investments tumbled