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Moody’s Investors Service downgraded Portugal’s government-bond ratings to A1 from Aa2, saying the Portuguese government’s financial strength will continue to weaken over the medium term.
“The Portuguese government’s debt-to-[gross domestic product] and debt-to-revenues ratios have risen rapidly over the past two years,” said Anthony Thomas, senior analyst in Moody’s Sovereign Risk Group.
The two-notch downgrade weighed on the euro, which hit a one-week low of 1.2522 against the dollar following Moody’s announcement.
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