The Eurozone refers to a currency union among the European Union member states that have adopted the euro as their sole official currency. The Eurosystem, headed by the European Central Bank, is responsible for monetary policy within the Eurozone.
The Eurozone has sixteen members - Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia and Spain.
Standard and Poors downgraded the sovereign debt rating of Spain from AAA to AA+. Greece’s rating was downgraded last week and Ireland and Portugal on credit watch negative, this could be the beginning of more downgrades.
Credit rating downgraded means higher costs of borrowing and a greater risk of defaulting on debt. This is because investors shift their money out of Spanish into a country with higher credit rating.
This movement will lead to Euro currency weaker. If you are trading the, EURUSD or EURJPY, do expects it to dive towards south.
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