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Pressure keeps mounting on the Euro

More negative news for Portugal and Ireland could imply a weakening of the single currency.

As various members of the Eurozone struggle with their debt crises, the single currency seems under even greater threat.

Portugal is experiencing further financial turbulence as it delays what seems to be an inevitable intervention. Today, the credit rating agency Standard & Poors downgraded five of the country's major banks, just days after having done the same to Portuguese sovereign debt. The former decision, the agency said, was simply a consequence of the latter.

The news of S&P's verdict triggered a flight of investors, which in turn generated surge on the yields of the country's ten year bonds. These reached a record-high 8.17 per cent, after rising to 8 per cent last Friday after the agency downgraded Portugal's rating from A- to BBB.

Elsewhere, Irish bankers expect bad news on Thursday, when results of the stress tests undergone by the island's major banks will be revealed. These are expected to show further weakness in the Irish banking system.

In Germany, the consequences of Angela Merkel's electoral defeat in the Baden-Württemberg state - one of her party's traditional bastions - may mean the country will not be willing to pay for further bailouts. Intervention in Portugal is likely to cost €75bn (£66bn).

Despite the continental malaise, the Euro's value remained stable at $1.40. This could be the result of European Central Bank (ECB) executive, Jean-Claude Trichet, arguing an imminent rise in interest rates would curve the lasting inflation affecting the Eurozone. Analysts, however, do not expect this relative calm to last.