http://www.cnbc.com/id/42427803

Credit rating agency Moody's cut Portugal's sovereign debt by one notch on Tuesday, saying it believed an incoming government would need to seek financing support from the European Union as a matter of urgency.

Davis McCardle | The Image Bank | Getty Images Portugal

Moody's cut its rating on Portugal's long-term government bonds to BAA1 from A3 and said the country's debt was still under negative review, with further downgrades dependent on Lisbon's ability to secure medium-term funding.

"...Moody's believes that the government's current cost of funding is nearing a level that is unsustainable, even in the short-term," the ratings agency said on a statement.

The euro [EUR=X 1.418 -0.0037 (-0.26%) ]eased to session lows of around $1.4172 after the downgrade.

Financial markets are convinced Lisbon will have to follow Greece and Ireland in asking the European Union and International Monetary Fund for a bailout.

However, caretaker Portuguese Prime Minister Jose Socrates, who resigned last month after parliament rejected his latest spending cuts, has made it a point of honour not to accept EU/IMF help. Read more

Time to short Euro -Divergence

Time to short Euro as there is divergence in the MACD.

Salute to those brave and unselfish people

Salute to those brave and unselfish workers in Japan who risk their lives trying to minimize the nuclear risks so that others will not be seriously affected. Read the heroic workers

Dollar Hits All-Time Low vs Yen, Falls Below 78

The dollar sharply extended its losses versus the yen to trade below 78 in late New York trading on Wednesday amid concerns over a nuclear crisis in Japan.

Luc Novovitch | Getty Images

The dollar [JPY=X 77.98 0.32 (+0.41%) ] hit as low as 77.60 yen on trading platform EBS. The previous record low was 79.75 yen set in April 1995.

Traders are nervously watching whether the Bank of Japan will intervene in the currency market to stem yen gains. A stronger currency makes Japanese exports less competitive and hurts the economy.

Officials scrambled Wednesday to contain the nuclear crisis in Japan with a variety of patchwork fixes. The head of the world's nuclear watchdog said while it was not accurate to say things were "out of control" in Japan, the situation was "very serious."

The yen has seen steady buying since last week's earthquake, as Japanese and international investors closed long positions in higher-yielding, riskier assets such as the Australian dollar, funded by cheap borrowing in the Japanese currency. Read more

Moody's Cuts Portugal's Debt Rating by Two Notches

Moody's on Wednesday cut Portugal's sovereign debt rating by two notches to A3 and said it might have to downgrade again given the impact of high borrowing costs and the difficulty of meeting tough fiscal targets.

AP

The euro [EUR=X 1.3982 -0.0014 (-0.1%) ]dipped only slightly on the news, which was widely anticipated and largely overshadowed by the gathering nuclear crisis in Japan, which has seen a massive flight to safety in global markets.

Moody's said it still held a negative outlook on Portugal's bond ratings as it considers a further downgrade to be more likely than an upgrade over the coming one to two years.

The rating agency said it was concerned about the high interest rates the government might have to pay to borrow on capital markets and what those rates could mean for the economy as a whole.

It also questioned how successful the government would be in achieving the tough fiscal targets it has set itself going forward.

And it cited uncertainties over how much support the government would have to provide to the country's banks and government-related issuers. Read more

Eurousd-Short Call

Expect Euro to drop further as it failed to make higher high. Short on high.

Our Prayers to ALL in Japan. May God help you all in this challenging time.

Lets pray for our brothers and sisters in Japan and may all things become better tomorrow.

Eurousd-picture speaks for itself