Euro falls as S&P cuts Spain’s credit rating

<p>The euro has slipped in forex trading as S&P downgrades Spain’s credit rating.</p>

The euro has slipped in forex trading this morning (October 11th) versus the pound and dollar following Standard & Poor's (S&P) decision to cut Spain's credit rating.

S&P has downgraded the troubled Iberian nation to BBB- from BBB+ – which is just one level above junk status.

The ratings agency warned of possible future cuts, as the country is struggling with soaring levels of debt and has the highest rate of unemployment in the eurozone at over 25 per cent.

A strict package of austerity measures has been implemented by policymakers in Madrid to combat the nation's gaping deficit, but many believe Spain will need to apply for a formal bailout, following in the footsteps of Greece, Portugal and Ireland.

At 08:45 BST, the euro was marginally lower versus the dollar, sliding to €1 buying $1.286 and while in trading with the pound, the single currency was also slightly down to €1 for every £0.803.

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