MOODY'S CREDIT RATING AGENCY DOWNGRADE CHINA OVER GROWTH SLOWDOWN FEARS IN THE WORLD'S SECOND LARGEST ECONOMY

Weeky review

Moody's credit ratings agency cut China's credit rating by one notch to A1 from Aa3, and also changed it's outlook for China to stable from negative.

Moody's said that the downgrade reflected expectations that China's financial strength would "erode somewhat over the coming years, with the economy-wide debt continuing to rise as potential growth slows".

Chinese stock indexes fell over one percent shortly after the market opened to the credit downgrade news, but recouped losses as the trading week closed. Commodity prices and mining stocks also tumbled, with gold prices falling towards $1247 per ounce on the news.

The EURUSD pair this week moved to a six and a half month high of 1.1268, as German Chancellor Angela Merkel said that the euro currency was "too weak" due to the European Central Bank's monetary policy.

The U.S dollar index moved lower as the release of the FOMC minutes were seen as a disappointment to financial markets, and appeared to indicate heightened Federal Reserve caution towards a June interest rate hike.