Portugal Rating Cut Two Steps by Moody’s as GDP to Fall

Portugal’s debt rating was cut by Moody’s Investors Service, which cited a weaker outlook for economic growth, risks to the government’s deficit-reduction plans and a possible need to recapitalize banks.

The rating was downgraded to A3, four steps from so-called junk status, according to an e-mailed statement from Moody’s yesterday, with the outlook on the grade “negative.” The euro slipped after the announcement, to $1.3982 per euro at 10:54 a.m. in Tokyo from $1.3998 yesterday.