MOODY'S DOWNGRADE TIMING 'ATROCIOUS' - A Moody's downgrading of Ireland's debt rating to junk status was based on the 'growing possibility' that Ireland will need a second bail-out before it can return to capital markets after the current EU/IMF support programme at the end of 2013.
For the same reasons as it gave for Portugal's downgrade last week, Moody's said private sector participation - which it says is likely in future bail-outs - will raise the cost of borrowing for 'peripheral' countries.
Ireland, Greece and Portugal have all been downgraded by ratings agencies several times in recent months.
James Hughes, senior markets analyst at Alpari UK, said there was a possibility that investors would leave Ireland as a result of the downgrade. But he said such downgrades are not really unexpected.
Mr Hughes said the timing of the Moody's decision was 'atrocious', and some of the reasons given for the move were not that well founded.
He said something needed to be done quickly about Greece in order to calm the current market fears about the wider euro zone.
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NEWS AND CURRENCIES - Details of the US Federal Reserve's last meeting show that some of its officials believe further monetary policy easing could be needed if a recovery remains too sluggish to cut the stubbornly high US jobless rate and if inflation eases as expected.
The euro was hit overnight by that Moody's downgrade, so on the currency markets this morning it is trading at $1.40 and 87.88p sterling.
