Forex focus: the debt dance

(Telegraph.co.uk)- On either side of the Atlantic currencies are lurching around trying to avoid another disaster. Both the Chinese and the credit rating agency Standard & Poor’s have downgraded America’s status from a triple-A nation to AA+ following the politicians’ inept handling of its ballooning debt obligations.

And the European Central Bank (ECB) had to step in on Monday to buy Italian and Spanish bonds to prevent them reaching the same dizzying heights as Greece’s government borrowing levels just before it needed a bail-out.

It’s one thing for the smaller economies like Greece, Portugal and Ireland to be bailed out, but major economies like Spain and Italy have been dubbed too big to fail and too big to bail. Read more here…