NEW YORK ( BBH FX Strategy) -- Peripheral eurozone stresses are back in the spotlight with today's downgrades of Spain and Italy by Fitch.While we are not surprised by the moves (more on that later), they did provide a grim reminder that the eurozone crisis remains far from settled within a deteriorating fundamental backdrop. The euro's rally has run out of steam around 1.35, having fallen a big figure since the downgrade news hit the wires. Here is a summary of recent ratings moves as well as our own sovereign ratings outlook. Fitch today cut Italy by one notch to A+ from AA- with a negative outlook. However, this rating remains too high as our own internal ratings model has Italy at A-/A3/A- vs. actual ratings of A/A2/A+. Note that Italy showed remarkable stability in its credit standing during the early part of the crisis and stayed at an implied A+/A1/A+ for quite some time. However, it has succumbed in recent quarters to fall to A-/A3/A- currently. Earlier this month, Moody's cut Italy three notches to A2 and last month, S&P cut Italy by one notch to A from A+. All three agencies have a negative outlook, so further downgrades appear likely. Fitch today cut Spain by two notches to AA- from AA+ with a negative outlook. Here too, this rating remains too high as our own internal ratings model has Spain also at A-/A3/A- vs. actual ratings of AA/Aa2/AA-. On July 29 2011, Moody's put Spain's Aa2 on review for possible downgrade.