- Irish downgrade due to bank liabilities, increased uncertainty on economic outlook, decline in financial stength
- Economy’s competitiveness and its business-friendly tax environment are credit positive
- Recent economic information in Ireland, in particular healthy export data are factored in to our conclusion
- Also downgraded Ireland’s “bad bank” by 5 notches to Baa1 from Aa2
- Ireland’s fiscal austerity programme is likely to weigh on domestic demand
- Expects Ireland’s debt ratio to increase to 120% in 2013 from 66% in 2009
- If Irish adjustments prove insufficient to stabilize debt metrics, a further rating downgrade would follow
EUR/USD back below 1.3300, presently at 1.3285.