The president of the European Central Bank said today he was confident the European Union common currency will perform better this year.
"I am very confident that the euro will be in a better shape in 2012," Mario Draghi told reporters in Abu Dhabi.
He also said that the euro zone is showing signs of stabilisation in some economic activities but significant downward risks linger.
"We have seen tentative signs of stabilisation of economic activity at a low level" in the eurozone, Draghi said after a meeting between European and Gulf central bankers in Abu Dhabi.
He said the tentative signs were showing amid "significant downward risks." "We see a softening business cycle in Europe with a significant downward risk," he said.
Earlier this week, the World Bank slashed its 2012 growth forecasts from 3.6% to 2.5% and warned that rich nations' debt problems may yet reap a crisis that would eclipse the tumult of 2008.
Bond auctions shrug off downgrades
France and Spain have both paid lower interest rates at their latest bond auctions, despite a downgrade of both countries by rating agency Standard & Poor's last week.
France raised a total of €9.46 billion. The average yield on its 10-year bonds dropped to 1.07% from 2.32% in the last comparable sale on November 17. The rate of return on short-term bonds also dropped considerably, by about 0.5 points to 1%.
Spain's borrowing costs also tumbled in an issue of benchmark 10-year bonds, a key part of a debt auction that raised far more money than first planned.
Spain sold a total of €6.6 billion in the auction of four-, seven- and 10-year bonds - well above the target of €3.5 billion to €4.5 billion. The 10-year rate fell to 5.403% from 6.975% on November 17 last year.
S&P's downgrade on Friday was largely anticipated by the market and has had little impact on French borrowing costs.
Fitch to downgrade "most" of euro six
Rating agency Fitch expects its ratings review of six euro zone countries to result in downgrades of one to two notches in most of them.
This is according to senior director Ed Parker, who was speaking at a Fitch conference in Madrid today.
Fitch put Belgium, Spain, Slovenia, Italy, Ireland and Cyprus on negative watch late last year. Mr Parker said the review would be concluded by the end of January.
Fitch told the euro zone late last year that it thought a comprehensive solution to the debt crisis was beyond reach.
Rating agency peer Standard & Poor's cut ratings on a swathe of euro zone states earlier this month.
