Fitch Ratings has recently confirmed Italy’s credit ratings A- and F2, with a negative forecast.
The rating agency took into account the current and future structural reforms and Italy’s economic potential. Another factor that contributed to Fitch’s decision was the Italian government’s obligation to cut the budget deficit and public debt.
The reforms that are currently seen in the Italian labor market are expected to make the national economy more flexible if they are implemented effectively and are attended by other structural changes to ensure growth in mid-term perspective.
Fitch experts express their hope that the Italian government will succeed in cutting the budget deficit down to 3% of GDP this year.
Nevertheless, the forecast is negative as there are still chances of a major economic decline. Fitch expects the Italian GDP to shrink by 1.9% this year. They say the GDP will start growing only in 2014.
Forex.
According to , EURUSD is flattish. In order to confirm and resume the recent rally, the price will have to consolidate above 1,2318. The closest level of support is 1,2218. If the price consolidates below it, the long-term downtrend will resume, thus canceling the bullish scenario.
