Six German bank groups downgraded by Moody’s today.

Action taken today by Moody’s regarding German banks resulted in long-term debt and deposit ratings for 6 groups and 1 German subsidiary group declined by 1 notch. The rationale for the German bank downgrade was driven by the increased risk of shocks continuing to emanate from the Eurozone debt crisis.

The European session ahead will be busy, with London markets opening for first time in the week after a 4-day weekend. Egan Jones’ downgraded its credit rating on Monday for the UK from AA to AA-, leaving a “negative” outlook on the country.

The risk event for GBP this week is the BoE’s interest rate decision on Thursday. Market participants are expecting policy to remain unchanged, with rates at 0.5% and QE at £325 billion.

The main event today is the Eurozone rate decision which will be announced at 11:45 at a press conference by Mario Draghi. As usual it will be Mr. Draghi’s objective to try and find support for the Euro and to help encourage fiscal integration.

A rate cut would be a relief to the struggling economies in the region especially Greece, Ireland, Portugal, Italy, and Spain. Despite this the ECB is expected to hold its interest rates at 1 % and there is an inflation target of 2%.

Chairman Ben S. Bernanke said in April that the Fed may provide more easing should unemployment fail to make “sufficient progress towards its longer-run normal level.” The U.S. central bank will release its Beige Book business survey today, ahead of its next policy meeting on June 19-20.

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