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The euro fell for a third day versus the dollar in the longest losing streak since February as Standard & Poor’s reduction in Greece’s credit rating renewed concern the region’s debt crisis is worsening.
Greece’s credit rating was cut to B from BB- by S&P, which said further reductions are possible, with private investors at risk if maturities are extended on the nation’s emergency-aid package. Another rating cut would make Greece the lowest-rated country in Europe as today’s move left it even with Belarus after the fourth reduction by S&P since April 2010.
“This downgrade is furthering the reality that we’re getting closer to the point of default,” said David Mann, regional head of research for the Americas at Standard Chartered in New York. “People may use this as a reason to take seriously that it could be a longer wait for a rate hike out of Europe, which would be euro-negative as well.”
The 17-nation currency rose earlier as a report showed exports in Germany, Europe’s largest economy, jumped in March, bolstering the case for higher interest rates in the euro region.
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