12/06/2011, 00.00
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Standard & Poor’s, European banks against the euro

The rating agency warns of possible downgrade for euro zone members, including Germany and France. Yet, Europe’s economy has grown in the past three months. Standard & Poor's appears less interested in the US and Japan as European banks bet against the euro.
Hong Kong (AsiaNews) – Asian stocks closed lower on Tuesday after ratings agency Standard & Poor's warned almost all euro zone members that they face possible credit downgrades. At the same time, the US and Japanese currencies could stoke inflation.

Standard & Poor's announced it was placing most euro zone members, including zone stalwarts Germany and France, and that there was a 50 per cent chance that their credit rating would be lowered.

Standard & Poor's wants EU leaders to find a solution to their debt crisis in next week’s meeting. Otherwise, it might drop the rating of countries like Germany, France, the Netherlands, Finland and Luxemburg (who enjoy a triple-A rating) by one level and the others by two.

The agency’s warning had a negative impact on Asian shares, which ended trading with losses. Tokyo stocks ended down 1.39 per cent today, Hong Kong shares fell 1.24 per cent, and Shanghai closed down 0.31 per cent.

Speaking to AsiaNews, Asian market analysts noted discrepancies in Standard & Poor's actions. “It is unclear why Standard & Poor's is targeting the euro and the euro zone and doing nothing about the United States and Japan,” said GT in Hong Kong.

“The United States is worse off than Europe, but no one is talking about it. The US public debt is huge. What is worse, Congress has not yet reached an agreement on debt reduction. I am afraid that we shall see the dollar fall heavily in a few months time, not to mention the Japanese currency. In fact, Japan has been printing waste paper for years.”

In the last three months, the European economy grew at the same pace as previous three months, but this has not changed the gloomy view about Europe and the euro. Some investors note that European banks appear to have lost faith in the euro, and Asian markets discretely took that into account.

When trading opened today in Europe, the euro lost 30-40 points. Ordinary people may believe that the euro’s movements are at a whim, that they are caused by the market. In fact, the market is made up of buyers and sellers, mainly banks trading according to their perceived interest. Today, European banks caused the drop in the euro.
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