Moody’s Investors Service said it put Portugal’s credit rating on review and warned of a possible two notch cut.
Portugal’s Aa2 government bond ratings—Moody's third-highest rating—could fall by one, or at most two, notches, the ratings agency said. The review is expected to be concluded within three months.
S&P already downgraded Portugal by two notches last week and the latest comments add to concerns about sovereign finances in peripheral euro-zone countries.
European markets extended losses and Lisbon’s PSI traded 2% lower. The euro dropped to a 13-month low against the dollar to trade below $1.29 on the news from Moody’s.
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