Quiet start to the week, re-opening discussions about concerns over Irish debt

It was a quiet start to the week with no data released so it left the stand clean for finance ministers to have their say and concerns over Irish debt re-surfaced.

The Euro, which had been boosted by a better than expected report on Germany's business climate, was weakened by a downgrade to troubled lender Anglo Irish Bank. Moody's, the credit ratings agency, downgraded Anglo Irish's debt to Baa3 from A3 with the Euro suffering as a result and losing ground to Sterling.

It is likely the Euro will remain under pressure during the third quarter of 2010 after EU ministers agreed that sanctions will be imposed on countries with high debts above 60% of GDP even if their budget deficits are in check. Not good news for Ireland, Spain and of course Greece.

The International Monetary Fund (IMF) said yesterday that the UK's fiscal austerity plan "greatly reduces the risk of a costly loss in confidence in public finances and supports a balanced recovery". The news was positive for Sterling in terms of foreign currency exchange as it rallied to a near 7-week high against the US Dollar.

Today the final UK Q2 GDP figure is released and will be closely watched by the markets, which is expected to be little changed from August's estimate of 1.2%, which was a four-year high. It is unlikely to change widespread perceptions however that the second quarter of 2010 marked the high point of the recovery.

In the US, consumer confidence index and the Richmond Fed manufacturing survey will bring further evidence about producer and consumer conditions at the end of Q3.