Sterling had a subdued end to the week following weaker than expected retail sales figures.
Sterling had a subdued end to the week following weaker than expected retail sales figures.
Currency rates
EURO/GBP - 1.1349
US$/GBP - 1.6139
CHF/GBP - 1.3668
CAN$/GBP - 1.5884
AUS$/GBP - 1.5361
ZAR/GBP - 11.010
JPY/GBP - 129.41
HKD/GBP - 12.579
NZD/GBP - 2.0041
SEK/GBP - 10.425
US$/EURO - 1.4205
Today's markets are likely to focus on the ongoing Greek debt crisis which has taken further turns over the weekend - most notably the deferral of payment of €12bn in emergency loans and still no decision regarding a new bail out. In terms of data in the UK this week, we have the MPC minutes on Wednesday and public finance figures tomorrow. Whilst the Bank minutes have the potential to cause volatility, they are likely to show that the bank has no desire to change the current monetary policy.
In the euro zone, Greek finance ministers yet again failed to reach agreement on a new package and have withheld the next tranche of loan payments until Athens follows through with tough austerity measures. The problem is that the Greek public doesn't want to change - several days of riots in Athens are testament to that. PM George Papandreou effectively pleaded to Parliament to support the austerity measures or face certain bankruptcy as Greece defaults on loan repayments in July, but various populist and socialist factions seem unwilling to support him. Meanwhile, analysis from the CEBR will today show that the euro is likely to break up within five years.
In the USA, it is an important week for USA with the next Federal Reserve meeting on Wednesday. The Fed's second round of Quantitative Easing comes to an end soon, and markets are expecting the Fed to maintain interest rates near zero for an extended period, but if the central bank embarks on another round of QE, this will trigger US dollar selling and actually help support the euro.
Elsewhere, Russian President Dimitry Medvedev stated that Russia's economic growth could be comparable to that of China and Brazil if it sorts out its problems. He forecast 4.5% growth for the economy this year.
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