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Sovereign Ratings - A Tool for Forex Fundamental Analysis

Sovereign rating is one method of assessing the strength of the world's currencies. Sovereign ratings by S&P and Economist Intelligence Unit are available free for forex traders.

Sovereign Rating by S&P

S&P Sovereign Ratings measures the likelihood that a sovereign country will honor its debt obligations. Ratings from C (lowest) to AAA (highest) are assigned to over 80 sovereigns which issue debt on international markets. Thus S&P's sovereign ratings can be used as a measurement of economic risk as well as the strength of a currency.

Sovereign Rating by Economist Intelligence Unit

Economist Intelligence Unit's sovereign rating evaluates the risk that a country will default on its foreign- and/or local-currency debts. Rating from D (lowest) to AAA (highest) are assigned to 120 countries, with the ratings for developing countries updated every month while those for most developed countries updated twice a year.