FX.co ★ Euro fundamental analysis for September 13.

Amid happenings in Greece Moody's rating agency has promised to downgrade the rating of French banks burdened by the Greece debt in the nearest future.
Now the situation with the euro has become rather adverse. Earlier the EU representatives told that they would not leave Greece alone in troubles and keep on supporting it, yet now they stick to an opposite opinion. Germany started elaborating a new plan called Plan B, as the national government is sure that the Greek default is inevitable. Amid events in Greece Moody's rating agency has promised to downgrade the ratings of French banks burdened by the Greece debt in the closest time. The situation is as follows: information on possible downgrading made stock prices fall down abruptly to their critical values. BNP Paribas dropped by 12,4%, Credit Agricole - by 10,6%, Societe Generale - by 10,7%. Societe Generale announced necessity to conduct assets sales for 4 bln. euros and carry out a programme of reducing expenditures. However, prices continued falling down.
STOXX 600 Banks Index is represented below. It is a composite index for stocks of the largest European banks.

From the fundamental point of view, this situation is frustrating for the euro. France and Germany are in fact ready to let Greece go and let default hit it, as a default of a small Southern country is hardly comparable to a downturn of the entire EU financial system.
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