It seems a rating downgrade for Spain is good news for the Euro. The market certainly thinks so with the one notch downgrade very acceptable under the circumstances. The Germany/Spain bond spread has narrowed to 187bps, its tightest since Sept 27. Even the Ireland bank news has generally been accepted as satisfactory. The FinMin laid it out on the table earlier today with the market seemingly happy that Ireland is not going to walk away from its predicament.
Throw into the mix ACB buying and EUR/USD is now some 60 pips above its intraday low. The day is of course still young and who knows what will be thrown up at todays London fix. EUR/USD last at 1.3618.