NEW YORK, Jan. 27 (Xinhua) -- Fitch Ratings cut the credit ratings of Italy, Spain and three other euro zone nations on Friday, saying they lack financing flexibility in the face of the region's debt crisis.
According to the rating agency, Italy, the euro zone's third- largest economy, was cut two notches to A- from A+, while Spain was also lowered two notches to A from AA-.
Ratings on Belgium, Slovenian and Cyprus were also lowered, while Ireland's rating was maintained.
Meanwhile, Fitch put all six nations' credit outlooks on " negative," indicating there is at least one-in-two opportunity for a further downgrade in the next two years.
"The Negative Outlook primarily reflects the risks associated with a further intensification of the euro zone financial crisis, though today's action incorporates Fitch's expectation that the crisis will be prolonged and punctuated by further episodes of market volatility," said the agency in its statement.
The downgrades came after the rating agency placed the sovereign ratings of these nations on watch in mid-December, blaming European leaders for not finding a "comprehensive solution" to the region's crisis.
However, investors mulled Fitch's decision on Friday. Euro rose against the U.S. dollar for the fifth straight day on optimism of a Greek debt swap deal with its private creditors while Italy's 10-year bond yield dropped below 6 percent after ending last year with a yield of more than 7 percent.
Special Report: Global Financial Crisis
