Do S&P Downgrades Matter?
Average people want to know whether or not S&P’s downgrades of European debt matter. Well, the truth is – no, not really. The downgrades really only matter if you’re a forex trader. (Go to this site to learn forex and get a forex training.)
Standard and Poors’ is a ratings agency for debt. Recently, the S&P downgraded American debt and it will soon downgrade the debt of many European countries. The firm sees the looming European debt crisis and inaction to be proof that the European nations are soon to be unable to make good on their obligations.
In particular, the Standard and Poor’s analysts have focused on France and Austria, two triple-A rated nations that have always made payments on time. Unfortunately, due to the Euro, the countries cannot print their own money and may have financing troubles in the future. This would obviously affect the Euro’s value on the forex market.