Greece may be downgraded by the end of March, said the rating agency - Standard & Poor's, as a weak economy and political unrest in the country makes it difficult for George Papandreou to cut budget shortfall - the largest among EU nations.

"We believe that a further downgrade of Greece of one to two notches is possible within a month," S&P analysts led by Marko Mrsnik in London, said in a statement.

Greece's credit rating was cut to BBB+, still investment grade from A- by S&P in December. Since then the Greece's Prime Minister - George Papandreou is having a tough time dealing with his own people and investors. While Papandreou is striving hard to persuade investors that the country can slash its deficit from last year's 12.7 per cent of GDP without outside help, people back home are protesting against severe austerity measures proposed by Papandreou.

Taking a cue from what it seems as an 'inevitable threat' now, the Euro fell to a one-year low against the yen and US Treasuries gained on 'flight to safety'.