Sterling dropped to a fresh 1 month low yesterday against the euro, dipping below €1.1190/£1 as the euro zone shrugged off concerns over Greek debt and the IMF raised the prospect of further quantitative easing in the UK. Whilst the IMF backed the UK government’s plans to reduce the budget deficit on Monday, it said that tax cuts or more quantitative easing could be needed if growth proves persistently weak. The UK economy is likely to grow by around 1.5%in 2011 before achieving growth of about 2.5 percent in the medium term according to the IMF. There are a number of risks to this growth though, so ensure that you protect yourself by speaking to a currency specialist sooner rather than later.

In the euro zone, the euro hovered near a one-month high against the US dollar and sterling on Monday as investor sentiment towards Greece improved as policymakers edged closer to agreeing a new aid package – expected to be in the region of €100bn. In addition, as the focus moves away from Greece, investors have eyed this week’s ECB interest rate decision on Thursday in which the central bank is expected to signal another rate hike in July. There are retail sales figures released later on, so call in now for a live exchange rate.

In the USA, it was a relatively quiet day with investor focus falling elsewhere. However, the impact of Friday’s woeful Non-Farm payroll figures caused a bit of a stir, with the US dollar stuck near a one-month low against a basket of currencies on the view that US interest rates will stay low for longer. In addition, Philadelphia Fed Chairman Charles Plosser made his thoughts clear in a statement outlining that he expected US monetary policy to tighten towards the end of the year and that Friday’s figures made no impact on his view. Fed Chairman Ben Bernanke speaks later today.

Elsewhere, the Canadian dollar traded near a two-month low versus the US dollar after last week’s poor US data sparked concern that the recovery of Canada’s biggest trade partner is faltering. The Canadian currency fell for a second day, so call in now to take advantage of better prices.

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