EU Moves Towards Scrapping Corporate Credit Rating Proposal, Euro Explodes Higher

The euro shot higher this afternoon after EU leaders approved new positions on credit ratings, while also paring back an amendment that would have forced companies to rotate credit agencies.

The news sent the euro to $1.2706, before retreating somewhat.

The European Parliament’s economic committee voted to scale back a proposal that would have required all companies to rotate credit agencies every three years.

Instead, lawmakers say they will only require structured debt products to re-rate every five years. Companies that use two or more ratings agencies will receive a partial exemption.

The proposal was meant to blunt overly positive credit ratings that many EU officials say fuelled the crisis. Parliament is now roughly in line with the position national governments take regarding ratings.  

Below, the euro’s intraday movement.

Euro USD

Photo: DailyFX

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