The EUR/USD slumped sharply on Friday to surrender the gains set in the week to the dollar on news that France lost its top credit rating according to the French TV.
The news hit the market hard that S&P downgraded France and likely Austria while Germany was safe, all reports were not confirmed with the end of the European session on Friday yet the market saw that the possibility is high to be seen as soon as this week and surely Fitch’s assurances that France was unlikely to lose the rating is now a lost cause.
On Monday we expect the volatility to extend and the losses to be seen with the lack of fundamentals leaving the eyes on the debt crisis and if the downgrades are confirmed. The volatility will extend with auctions scheduled for the day and that might see the end of the stability at the bond market and last week’s good auction run.
10:00 GMT Slovakia sells bills
10:30 GMT Netherlands sell bills
14:00 GMT France to sells bills