Euro falls further against the US dollar as Germany sees AAA ratings watch

The euro currency fell further, marking a fifth straight day of losses against the US dollar as weak European data and a ratings watch for Germany added further gloom for the common currency.

Latest Euro Exchange Rates

The euro was at $1.2097, down 0.1 percent on the day, and not far from a two-year low of $1.2067 touched on Monday as concerns about Spain’s debt problems intensified.

Germany AAA Rating Negative

Credit ratings agency Moody’s has changed its outlook for Germany’s AAA credit rating to negative, the first step towards a possible downgrade. Moody’s said the country was at risk from the increased likelihood of a Greek exit from the euro and the need to provide more support to Spain.

Earlier this year, Moody’s put France and Austria’s AAA ratings on negative outlook.

Moody’s said there was an increased chance that Greece could leave the eurozone, which “would set off a chain of financial sector shocks”.

It added that policymakers could only contain these shocks at a very high cost.

Germany’s private sector shrank in July at the fastest rate in more than three years, according to a survey that underscored the spread of the eurozone crisis to the bloc’s strongest economies and cemented the likelihood that the region has slipped into recession.

A eurozone index of purchasing managers showed activity across the region’s private sector contracting for a sixth successive month.

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Euro falls further against the US dollar as Germany sees AAA ratings watch