Dollar downgrade by S&P - how will this affect Euro interest rates?

[Spear]

Anyone care to speculate how the recent downgrade on the US will affect the interest rates over here?

 

[Jim2007]

Well why do you think it should?

 

[tvman]

Treasury Bill yields were negative for a while last week when this downgrade was expected - I think the downgrade will be a non-event. The downgrade itself doesn't make it any more likely the US will default. Effect on interest rates here - probably none i would think unless the dollar falls dramatically, then the ECB would presumably cut rates (unlikely to be a major dollar reaction - I'd say this was already partially priced in)

 

[tvman]

Treasury Bill yields were negative for a while last week when this downgrade was expected - I think the downgrade will be a non-event. The downgrade itself doesn't make it any more likely the US will default. Effect on interest rates here - probably none i would think unless the dollar falls dramatically, then the ECB would presumably cut rates (unlikely to be a major dollar reaction - I'd say this was already partially priced in)

Looks like my assessment of a "non event" above couldn't have been more wrong