At one point it looked as if the Eurozone would be immune to growing debt fears which were playing out in other economies around the globe. However, with rumours that France is on the verge of being downgraded from their current AAA rating, investors are rethinking Forex strategies.

Debt Fears Spreading to Major Economies

At first it appeared as though debt fears were limited to peripheral European states, but yesterday’s news indicated that there is concern France, a major economy in the Eurozone, might soon be downgraded by the rating agencies. Perhaps a few weeks ago this wouldn’t be such an issue, but as the world has seen in the past week, even superpowers like the U.S. are not immune to being downgraded from the prestigious AAA to AA+.

France’s Banking Sector Huge Cause for Debt Fears

Whilst it has been common knowledge that France’s government was in trouble, the banking sector appeared to be secure and free from debt fears. Unfortunately, banks in France have been negatively impacted by outstanding debt from Italy and Spain which is causing a heavy strain as they may be defaulting on loans in the near future. This is causing the Franc to trade down in the Forex market as investors foresee major weakening in that country’s economy.

UK, US and Eurozone Debt Fears Causing Global Concern

It is not only the France which is being devalued as the Forex market has also seen a decline in the Great British Pound, the United States Dollar and the Euro as well. However, it is not only the Pound which is losing ground but British banks have also lost ground as a result of a weakened economy. All these debt fears are proving to make an already volatile market (Forex) even more so as the world watches what the rating agencies will do next and which country will be the next to lose its Triple A rating.