Stand and Poor’s (S&P), one of the 3 largest rating agency, has cut the rating of France and 8 other Euro-zone countries so total 9 countries were downgraded on last Friday. France has lost its AAA with one notch so France now has AA+. While Italy and Spain were downgraded by two notches. This is very bad news for Euro-zone economies. S&P has warned months ago about the possible downgrades as dozen of countries were under the watch for negative outlook. Italy and Spain were downgraded by two notches to BBB+ and A respectively. Slovakia, Austria, Slovenia and Malta were cut by one notch. Another small country Cyprus lost its ratings by two notches. Portugal’s rating was also cut by two notches said S&P. Germany, Belgium, Luxembourg, Estonia, Ireland, Netherlands and Finland are the countries who were able to keep ratings unchanged.
EURUSD pair made a low of 1.2623 on Friday, just after the news of downgrade was confirmed by French authorities. This was new low on EUR/USD after September 2010. WE may see much lower levels next week on Euro. We also see stock markets across globe to weaken due this move by S&P, we are advising traders to short nifty future or buy nifty 4900 put options near 80 levels for targets as 135 and then 160 level, we will also advice traders to place their stop loss for this trade just below 53 level.