Euro fall after Moody’s Cuts Ratings of Five Spanish Regions

The Euro weakened against the dollar and the yen after Moody’s cuts ratings of five Spanish regions and as the European Union’s highest court weighed a challenge to the region’s bailout fund. The Euro price fell to 1.3020 this morning.

The yen regained some ground after hitting a three month low against the dollar and five month low against the euro on today, but looked vulnerable to expectations of more monetary easing from the Bank of Japan.

The euro fell 0.2 percent at 8:57 a.m. London time after rising 0.3 percent yesterday. The shared currency dropped 0.4 percent.  It earlier advanced to 104.59 yen, the strongest since May.

Moody’s cut the rating of Catalonia, which accounts for a fifth of Spain’s economy, by two steps to Ba3, according to a statement dated yesterday.  Moody’s kept Spain’s sovereign rating at Baa3.  A hearing is scheduled for today, with a ruling possible as soon as year end under a fast track procedure.