{"id":92521,"date":"2016-07-07T07:05:07","date_gmt":"2016-07-07T11:05:07","guid":{"rendered":"http:\/\/countingpips.com\/?p=92521"},"modified":"2016-07-07T07:05:07","modified_gmt":"2016-07-07T11:05:07","slug":"aussie-pressured-as-sp-warns-on-australias-credit-rating","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2016\/07\/aussie-pressured-as-sp-warns-on-australias-credit-rating\/","title":{"rendered":"Aussie pressured as S&P warns on Australia\u2019s credit rating"},"content":{"rendered":"
July 7, 2016<\/div>
\r\n<\/div><\/div>

Article by ForexTime<\/a><\/p>\n

The Australian dollar has slid and shares have pared gains after Standard & Poor\u2019s downgraded its outlook on Australia\u2019s AAA credit rating to \u201cnegative\u201d.<\/p>\n

Australia\u2019s sovereign debt still holds the top rating from all three major ratings agencies, but S&P now warns the country needs to take drastic action to remedy its budget, lest it potentially suffer a ratings downgrade.<\/p>\n

S&P said:<\/p>\n

The negative outlook on Australia reflects our view that without the implementation of more forceful fiscal policy decisions, material government budget deficits may persist for several years with little improvement. Ongoing budget deficits may become incompatible with Australia\u2019s high level of external indebtedness and therefore inconsistent with a \u2018AAA\u2019 rating.<\/p>\n

Owing to the deadlocked outcome of the July 2 general election that has yet to hand either of the major parties an outright majority in either the upper or lower houses of parliament, the agency said it believes \u201cfiscal consolidation may be further postponed.\u201d<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

S&P is complimentary on aspects of the Australia economy and financial system, such as Australia\u2019s external borrowers maintaining easy access to credit markets, the strength of the banking system and monetary policy credibility.<\/p>\n

Australia is one of only a handful of sovereign borrowers to enjoy the highest credit rating from all three major agencies \u2013 S&P, Fitch and Moody\u2019s Investors Services. That pool of triple-A borrowers has dwindled since the financial and European sovereign debt crises of recent years, making Australian debt a standout choice for investors seeking high-quality debt.<\/p>\n

But the agency is clearly more sanguine on the prospects of Australia delivering fiscal outcomes that are stronger than its peers.<\/p>\n

There is a one-in-three chance S&P could downgrade Australia\u2019s \u201cAAA\u201d credit rating over the next two years if \u201cparliament is unlikely to legislate savings or revenue measures sufficient for the general government sector budget deficit to narrow materially and to be in a balanced position by the early 2020s\u201d or if Australia\u2019s current account deficits remain high or terms of trade weaken.<\/p>\n

 <\/p>\n

\n

\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Article by ForexTime The Australian dollar has slid and shares have pared gains after Standard & Poor\u2019s downgraded its outlook on Australia\u2019s AAA credit rating to \u201cnegative\u201d. Australia\u2019s sovereign debt still holds the top rating from all three major ratings agencies, but S&P now warns the country needs to take drastic action to remedy its […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-92521","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/92521","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=92521"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/92521\/revisions"}],"predecessor-version":[{"id":92546,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/92521\/revisions\/92546"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=92521"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=92521"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=92521"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}