The reduction of a euro zone nation's credit rating pulled down the value of the common currency of the European Union on Wednesday against the U.S. dollar and the Japanese yen, according to Bloomberg.
Moody's Rating Service, in addition to downgrading Italy's rating, also warned other regional nations that hold perfect debt ratings that their rating is not safe and could be subject to further correction. Speculation widened about the European Central Bank's readiness to act on the moribund economy during Thursday's policy maker meeting.
The economy of Europe "is looking softer on some key measures," currency strategist Greg Gibbs with Royal Bank of Scotland Group in Sydney told Bloomberg. "They will cut rates on Thursday. We'll see the euro more likely to be lower than higher from current levels."
The greenback gained in value following the Tuesday congressional testimony of U.S. central bank chief Ben Bernanke, who said the institution he leads is ready to intervene to spur economic growth and development.
Investors with a skeptical outlook about euro zone banks' ability to effectively prepare for a Greek default dragged down the value of the euro, which neared its lowest value in nine months, according to Reuters.
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