Portugal's Debt Downgraded, Euro Slides

The euro continues its slide today as it reaches an 11-month low at $1.3348. This is coming on the news of a downgrade of Portugal’s debt by Fitch Ratings. The recent downgrade increased pressure for eurozone governments to come up with a solution to their financial collapse.

This decline of the euro really began in November when Portugal, Ireland, Italy, Greece and Spain (PIIGS) were deemed financial unstable and not at a position to refinance their debt.

The Portuguese government’s budget deficit was 9.3% last year, well above the 6.5% estimate projected by rating agencies. In a statement from Fitch Ratings, they said, “this has significantly increased the scale of the fiscal challenge to stabilize and reduce debt over the medium term.” Portugal is currently a long way off from the European Union’s 2013 goal of a deficit target less than 3% GDP.