UPDATE 1-Fitch slashes Irish rating again, sets stable outlook

* Cuts rating two notches to "AA-" from "AA+"

* Follows initial cut in April

* Euro trims gains after move, Irish bonds suffer

(Adds analyst quote, market reaction)

DUBLIN, Nov 4 (Reuters) - Fitch on Wednesday slashed Ireland's credit rating by two notches, citing the severity of its economic and fiscal downturn and prompting a retreat for the euro EUR= from earlier gains.

The cut -- the second in just over six months after a cut in April -- reduced Ireland's sovereign rating to 'AA-' from 'AA+', skipping the 'AA' rating. But the agency put the outlook for the rating going forward on stable due to Dublin's aggressive measures to solve its problems.

The euro trimmed gains against the dollar and the yen while the spread between Irish and euro zone government bond yields widened on the Fitch move.

Ireland has regained some investor confidence with a commitment to cut its bloated budget deficit and to pay 54 billion euros to cleanse banks of their risky commercial property assets by setting up a "bad bank".