Sterling slipped against the US dollar as investor sentiment plunged as European governments failed to agree on releasing a loan payment to Greece. However, sterling did recover later in the day after comments from a top euro zone policy maker helped calm immediate fears over stability in the region. Financial markets were very nervous on Monday morning, with many market participants heading back to their desks to a number of downbeat reports over Greece – including one from Mayor Boris Johnson, who suggested in The Telegraph that the best thing would be for Greece to leave the euro. However, the panic has calmed to an extent, and focus in the UK shifts to public borrowing figures – released later today.

In the euro zone, it was a roller coaster day yesterday. News came through in the morning that euro zone finance ministers had delayed a decision on paying €12 billion worth of emergency loans to Greece, stating that Athens would first have to introduce austerity measures. The issue is that the Greek public do not seem to want the austerity measures. If the funds are not paid, Greece will default on a key repayment in mid-July. The next key test is for the Prime Minister George Papandreou, who faces a vote of confidence today in Parliament. If he loses this, the chances of the tough austerity measures being passed are slim. We are likely to continue to see significant euro volatility, so call in now for a live exchange rate.

In the USA, stock markets suffered on Monday as investors were hesitant to buy riskier assets after a decision was delayed on emergency loans to Greece and Moody's said it may downgrade Italy's credit rating. The US dollar gained against a basket of major currencies. However, comments from the chief of the European Financial Stability Facility saw the euro recover, as the chief of the fund stated that its guarantees would be raised to €780bn. Call in now for a live exchange rate.

Elsewhere the Swiss franc strengthened against its 16 major peers as investors scrambled for safe haven currencies. The Australian dollar fell versus all of its most-actively traded counterparts, losing 0.5 percent against the US currency for similar reasons.

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