The monetary unit of the largest economy on the African continent slipped to the world's reserve currency on Tuesday, pulled down by credit rating reductions to six European nations, Bloomberg reports.
The value of the South African rand fell after Italy, Spain and Portugal – three nations damaged by the sovereign debt crisis during the past two-plus years – were downgraded by Moody's Investor Service, which also put the U.K. and France on notice about losing their perfect AAA ratings.
"The apparent optimism which emerged after the Greek parliament voted through the austerity package yesterday morning is starting to look like a distant memory," states a Tuesday email penned by institutional flow sales head Brigid Taylor with Nedbank Group, accordinig to Bloomberg. "Players were seemingly wary of getting exposed one way or the other since the euro group meeting will be held on Wednesday."
The credit rating service also place negative outlooks on Spain, Italy and Portugal's credit ratings. Slashes also were applied to Slovakia, Slovenia and Malta.
Credit rating reductions were not entirely surprising to many who have been watching the sovereign debt crisis during the past two-plus years of its destructive path, according to Reuters.
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