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Greece Aftershocks

Another rating agency has downgraded debt issued by Greece. What must you know about this development?

On Wednesday Standard & Poor's cut Greece's credit ratings by one notch, following similar move by Fitch last week, which triggered sell-off in bonds issued by that nation.

S&P said in a statement it decided to downgrade Greece because its recently announced fiscal measures are unlikely to lead to a "sustainable" reduction the public debt burden.

"We believe that the government's efforts to reform the public finances face domestic obstacles that would likely require sustained efforts over a number of years to overcome," S&P said.

The ratings agency cut Greece's ratings to BBB-plus from A-minus and left the new rating on "creditwatch" negative.

Last week Fitch cut its rating on the indebted country to BBB-plus from A-minus.

What does this development mean for investors?

The downgrade will increase concerns that Greek banks will no longer be able to use government bonds as collateral to obtain funds from the ECB when the Bank's rules re-tighten in a year's time, explains Jonathan Loynes, chief European economist at Capital Economics.

As a result, it is critically important that Greece now implements the measures (it) has announced, President of the European Commission Jose Manuel Barroso told CNBC in an interview.

Although it is doubtful the European Central Bank would stop supporting Greek banks, the downgrade does add more pressure on Greece to improve its finances next year, Loynes adds.

What's the trade?

I'm watching the Dollar Index, says Tim Seymour. Fears of default have increased the greenback's safe haven appeal. At $77.50 it broke above a critical technical level -- to the upside.

However, I still believe the long term trend is lower. I’m now watching 81.25 on the Dixie. If the dollar trades above that level I’d establish a new position in commodities as a long term weak dollar bet.

I’m tracking the Dollar ETF, says Pete Najarian. I’m seeing unusual options action into March, which suggests at least some big investors are betting on an upside move for months to come.

I think the dollar likely has 10% more upside, speculates Guy Adami.

And I expect to see investors who are short the dollar and long equities start to take that trade off, adds Karen Finerman.

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Trader disclosure: On December 17th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (AAPL), (BAC), (FXI), (INTC), (TSO),  (GE), (EEM); Finerman's Firm Owns (MSFT), (NOK), (AAPL); Finerman's Firm Owns (BAC) Preferred, (BAC), (BAC) Call Spreads; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (UNG); Najarian Owns (ORCL) Jan. Calls, Is Short (ORCL) Dec. Calls; Najarian Owns (AAPL) Calls; Najarian Owns (FCX) Call Spread; Najarian Owns (GE) Calls; Najarian Owns (MS); Najarian Owns (RIMM) Jan. Calls, Is Short (RIMM) Dec. Calls; Najarian Owns (UUP) Call Spread

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