Greek debt haircut constitutes default: Fitch

The euro fell against the dollar (EUR/USD-I1.42-0.002-0.16%) Friday after Fitch ratings agency said the deal reached by European leaders Thursday to cut Greece’s debt load would constitute a default for the country.

The plan asks Greece’s private creditors to take losses of 50 per cent on their holdings of the country’s bonds, which is meant to lower Greece’s debt burden.

Fitch said that despite the deal, Greece would still have a large amount of outstanding debt and that the country’s growth prospects remain weak. The ratings agency said the deal would constitute a default for Greece.

In afternoon trading Friday, the euro fell to $1.4158 (U.S.) from $1.4216. On Thursday, the euro hit a seven-week high of $1.4246 after European leaders announced that they had reached a deal to contain the region’s debt crisis.

Read Full Article from Globe and Mail

- Posted: 2011-10-28 13:25:10

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