The German Landesbanks (owned by the states within Germany) for years had AAA ratings, allowing them to coin money as a prefered counterparty for credit-concious counterparties. The days of AAA ratings are long-since past and their competitive advantage has eroded as a result. Five of the banks just had their ratings cut by S&P and their outlook left on negative.
This is helping slow the EUR/USD rally and putting more focus on reflation trades like short euro/long Aussie.
EUR/USD has eased to 1.3335 from 1.3374 higsh.
