Overnight S&P the ratings agency, cut the Spanish credit rating to BBB+ from a reflecting the increased fear that the government will need to provide further fiscal support to the ailing banking sector.
To compound matters, the Spanish unemployment number came in higher than expected; a staggering 24.4% of the population is now without a job.
The figure is higher amongst younger people, with almost half looking for work.
As labour market laws are overhauled unemployment is likely to get worse before it gets better, meaning there will be further pressure on the Spanish credit rating and hence the rate at which Spain can borrow in the market moving forward.
Amazingly, Sterling shrugged off the negative GDP figure on Wednesday and now trades slightly higher against the Euro and Dollar than before the announcement.
This is probably due to the worse than expected European news more than Sterling gaining, but the Pound is likely to come under pressure at some point over the coming week.
The US Dollar remains subdued after the Fed statement earlier in the week neither confirmed nor ruled out further easing.
The uncertain stance has left the Dollar slightly rudderless given that we are also fairly risk neutral across the markets as a whole (but on the negative side of neutral).
That should come to an end when the US GDP number comes out this afternoon, with expectations of an annualised rate of 2.5%.