The long-awaited €18 billion of recapitalization funds, in the form of EFSF bonds, were finally made available to Greece on Monday. The country distributed the money among its four biggest banks: National Bank, Alpha, Eurobank and Piraeus Bank.
Egan-Jones Ratings has cut Spanish debt to B from BB- on Tuesday, with a negative outlook remaining on the table. The agency said in its press release that the "Spanish government will inevitably be faced with payments to support its banking sector and for its weaker provinces.
Also the Spanish government is facing a major setback from the ECB. Hopes of indirectly tapping the Central Bank for cash to recapitalize troubled lender Bankia, were dashed yesterday. The bank needs an immediate €19bn injection with another €55Bn over the next five years.
In the UK, the Confederation of British Industry (CBI) has called on the government to offer subsides to investors in order to gain access to billions of pounds worth of private sector funds for infrastructure spending. The CBI argues that this could help improve telecoms, transport, and energy projects.
The Euro has once again fallen below the psychological level, with further downside pressure against the US dollar. There has been a substantial drop in GBP/USD as safe havens benefit in these current times of uncertainties. It is a good time to hedge your requirements and cover your risk as we could see further support level broken if Spain continues to worry investors.
For a live exchange rate login to RationalFX now, or call +44 (0)20 7220 8181.