Sterling fell to a 2 week low against the US dollar on Friday, hurt by figures that showed that UK industrial output contracted by 1.7% in April as a result of the extra bank holiday in April. However, with concerns over the Greek debt crisis looming yet again, sterling strengthened against the euro and is trading above €1.13/ £1 this morning. UK interest rates are still expected to remain on hold until at least the beginning of next year. It is a relatively quiet day today, but it will be interesting to hear the thoughts of Bank of England policymaker Martin Weale who has been advocating a 0.25% hike for some time. He speaks later today. In terms of data for the rest of the week, there is UK inflation data out tomorrow, unemployment figures on Wednesday and retail sales figures on Friday. Call in now for a live exchange rate to ensure that you don’t lose out due to market volatility.

In the euro zone, the euro strengthened briefly against the US dollar this morning after some “short-covering” – i.e. traders buying back euros to protect against bets that the currency will move down. However, the trend is very much downwards for the single currency as European policymakers are still no closer to agreeing a framework for a financial aid package to Greece. Despite signalling an interest rate hike next month, the ECB kept inflation forecasts on hold which saw investors cut interest rate expectations past July. Out this week we have a range of industrial production figures, none of which are expected to be market movers. Call in now for a live exchange rate.

In the USA, markets have started to follow a risk averse pattern of trading in the last few days. The euro zone debt crisis, and concerns over global growth have seen investors moving funds into US government bonds just 2 weeks ahead of the end of the US Federal Reserve’s second round of asset purchase funding. There have been no hints as to whether a third round of funding will follow, and with poor recent data, investors are expecting the worst. Call in now for a live exchange rate.

Elsewhere, another earthquake in New Zealand overnight has seen sterling jump against the NZ dollar by over 1%. The quake-prone city of Christchurch is set to experience further aftershocks over the coming days. Damage caused is set to see interest rates stay on hold for longer as the second earthquake hampers efforts to rebuild following September’s earthquake. Call in now for a live exchange rate.

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