EURO
The Euro is trading flat against the pound but has made some strong gains into 1.32 vs. the USD as a resolution to the Greek debt situation nears. The ECB is due to announce its interest rate this afternoon and is widely expected to keep rates at 1% as the focus remains on Greece who are expected to agree to further austerity measures, opening the doors for a rescue package to avoid any major default. If this happens today, the single currency is likely to rally in the short terms against the majors and particularly against the pound which is coming under pressure from QE expectations.

US DOLLAR
The Dollar is trading lower against the pound this morning and even more so vs. the Euro as expectations for a deal over Greece supports demand for the single currency. Focus for USD traders will be on the ECB and ongoing reports from Greece today, although weekly jobless claims will be released this afternoon. Events in Europe continue to take centre stage at the moment and recent stronger US data has helped increase appetite globally for risk and has resulted in a USD sell off.

EURO
The Euro is being heavily support by a return to risk appetite in the currency markets this morning, allowing the single currency to make gains against the USD and euro. Demand has been supported by hopes that Greece will reach a deal on austerity measures and avoid a default with Greek parties likely to strike a deal today to accept new reforms in return for an international rescue. This prospect along with some uncertainty around the result of UK data could well strengthen the Euro further against sterling today.

US DOLLAR
The performance of the USD has been heavily influenced by activity in Europe as the market continues to monitor events in Greece. The Fed’s weekly retail sales index showed a rise in activity to 2.5% from 2.0% year on year while consumer credit levels remained largely unchanged. Demand for riskier currencies has seen a sell off in the US currency ahead of US mortgage related data scheduled for this afternoon.

EURO
The Euro has rebounded a little against the pound today and has gained nearly 0.25% vs. the USD. The single currency is holding firm as Greek bailout talks drag on with the market focus firmly on developments in the member state and investors hopeful that an agreement can be reached in Athens to avoid a default. The single currency has been helped by Eurogroup President Jean-Claude Juncker who said he had no doubt about Greece’s future in the euro zone providing they fulfilled duties to other member countries. Economists are expecting the Euro to trade within the current range against the majors in the short term and unless there is extremely positive news surrounding Greece, this is set to continue.

US DOLLAR
The US currency is trading lower against the pound and even more so vs. the Euro as the focus remains on Europe. Today investors will pay careful attention to Fed Chairman Ben Bernanke’s speech at 3pm with any positive news on the economic front likely to support the US currency for the rest of the week. The USD will be particularly supported if the Fed provide any indication that they are prepared to raise interest rates earlier than expected.

EURO
The Euro is down 0.5% against the pound this morning and 0.75% vs. the USD as meetings between Greek politicians continued over the weekend but as expected have shown no signs of being concluded. The IMF, EU and ECB have requested Greece propose further austerity measures by this morning in order to receive a new bumper bailout package and avoid defaulting. Greece is likely to be the main story of the day for the market with unions planning a 24hour strike tomorrow to protest against pay and pensions reform. The single currency therefore remains very much under the spotlight and subject to further weakness amongst the current economic situation.

US DOLLAR
The USD is trading stronger this morning against the major currencies, aided by hugely encouraging jobs numbers out on Friday that saw 243,000 new jobs added to the economy last month. The unemployment rate has also started to fall, moving down into 8.3%, the lowest level in 3 years and even lower than this side of the Atlantic. Today is a quiet one in terms of economic data for the US until tomorrow afternoon when Fed chairman Ben Bernanke testifies on the economic outlook and federal budget.

EURO
The Euro is trading sideways against the majors this morning as we await key US data today whilst the Euro zone takes a back seat in terms of economic data. The issue of the Greek debt swap deal is ongoing with an announcement yesterday that a meeting this upcoming Monday (Feb 6th) is the new deadline for the parties involved to agree on a deal and I have to say I am not massively optimistic about this one . In other news poor auction results in Spain yesterday have added some pressure on the single currency but German PMI services figures have kept the euro stable in early morning trading.

US DOLLAR
The USD remains very close to where it finished yesterday against the majors after the release of better than forecast jobless claims which fell to 367k . Risk appetite was increased yesterday by Fed Chairman Ben Bernanke testimony to congress perceived as being more bullish than expected. The attention in the foreign exchange markets will now be very much on US non-farm payrolls figures which highlight the number of new jobs created in the US, forecasted to be lower than the previous month.

EURO
The Euro is trading within similar ranges to yesterday against the USD and has made some small losses vs. the more popular pound. There has been some renewed confidence for a debt swap deal after comments from Greek Finance Minister Evangelos Venizelos who said talks with private creditors on a bond swap deal was “one formal step away” from being finalised. Investors are however, continuing to limit their exposure to the single currency especially with the sovereign debt situation in Portugal showing no sign of going away any time soon. The ECB is expected to continue with its policy of offering cheap money to Euro zone banks in order to get much needed funds into companies and consumers in a similar way to the BoE. Demand for riskier currencies remains stable for now.

US DOLLAR
The USD is trading marginally down against sterling and the Euro zone after economic data released was mixed giving little support for the US currency. The ADP employment report disappointed slightly showing the number of new private sector jobs being created had fallen more than expected at 170K in January, analysts had forecast for a drop of 185K for the month. Positive releases came from construction spending data and the ISM manufacturing index, construction spending increased 1.5% in December, up from the 0.4% seen the previous month, while manufacturing activity expanded further with the index increasing to 54.1 from 53.1 in January. This afternoon we await the second of this week’s US jobs data releases with the weekly jobless claims number before the main non-farm payroll number tomorrow.

EURO
The euro is trading stronger against sterling this morning after the pound made some juicy gains in early morning trading before losing 0.5% to the single currency. Against the USD the euro is also trading stronger, currently up 0.40% on the day despite investors growing bearish on prospects for the Euro with the Greek debt swap talks continuing to bumble along. The Portugal situation has also reared it’s ugly head again with expectations for another bailout package adding to already tough austerity measures in the region likely to hamper the Euro zone economy further and the single currency.

US DOLLAR
The USD is losing out to the euro this morning and trading flat against the pound after yesterday’s economic data disappointed the market. Weekly US retail sales activity contracted in addition to manufacturing activity and with lower consumer confidence numbers this all very much supports the Fed’s dovish (low interest rates) stance on monetary policy. The focus today in terms of economic data will be on ISM manufacturing and the ADP non-farm employment change before the main employment data due on Friday afternoon.

EURO
The euro is marginally down against the pound this morning and has made gains of nearly 0.5% vs. the USD on hopes that Greece can reach a debt sap deal with its creditors by the end of this week. Greek Prime Minister Papademos said negotiators have made good progress and that Greece and its private creditors could reach a definitive deal by the end of the week. This optimism has helped the Euro make some small gains and increased appetite in the market for riskier currencies such as the pound and euro.

US DOLLAR
The USD has weakened significantly against the pound and euro this morning on the back of more hunger for risk in the foreign exchange markets as investors monitor events in Europe closely. Yesterday saw a slight drop in US personal consumption data but this figure was not viewed upon as significantly negative. The release of the Dallas Fed region manufacturing aided appetite for risk with the data showing a strong improvement in activity for January. This afternoon sees the release of some employment and consumer confidence data in the US.

EURO
The Euro is down by nearly three quarters of once percent this morning vs. the USD and is trading weaker against the pound ahead of a big day for the euro zone with a summit in Brussels ongoing and talks continuing between Greece and private creditors on a debt swap deal. There is some speculation in the market that EU leaders are expected to sign a deal for a permanent bailout fund in the euro zone and renewed legislation. However these talks may be overshadowed by the ongoing Greek debt saga and how a deal will be reached with creditors for them receiving the next bailout amount due.

US DOLLAR
The USD is up against the pound and euro this morning, bouncing back from lows seen last week after the Federal Reserve kept interest rates at their current level with no change expected until 2014 in addition to weaker growth figures in the US. More recent data from the University of Michigan indices showed confidence in a continued economic recovery for the US remained, also aided by reasonably strong GDP data which came out at 2.8%, marginally below the 3% forecast. Today sees the release of personal consumption and manufacturing data in the US.

EURO
The Euro remains stronger against a weaker USD this morning up 0.39% also up marginally against the pound. The Euro has been relatively stable towards the end of this week supported by hopes (and they are hopes) for a Greek debt swap deal to avoid a messy default. The single currency is however being hit at from another angle with increasing concerns that Portugal may be heading for a second bailout and debt write downs.

US DOLLAR
The USD weakness is continuing today with the pound holding above 1.57 and 0.25% up on the day whilst the single currency has made gains of 0.38%. The Fed’s commitment to keep US rates on hold through the end of 2014 has sparked some concerns that a third round of quantitative easing may be required to stimulate the US economy, weakening the US currency. The main highlight for this afternoon is advance GDP for the US economy forecast at 3.0%, this is likely to have the biggest impact out of the three growth figures (for the last quarter) and is likely to have a negative impact on the market if the number is significantly below forecasts.