Sterling fell against the US dollar on Friday as investors looked to the safe haven US dollar on fears over the euro zone crisis, with investors particularly worried about a confidence vote in Greece. Against the euro, sterling strengthened and held above €1.16/£1. Furthermore, analysts expect sterling to gain further ground as interest rates in the euro zone start to come down. The Bank of England meets later this week, but the outlook for monetary policy is looking relatively stable in the UK versus Europe, which could bode well for sterling against the single currency. Industrial activity measures could potentially be a slight worry this week and as such we could see a contraction in growth heading into the beginning of 2012. Later in the week we have wholesale price inflation figures so call in now for a live exchange rate.

In the euro zone, it was a turbulent week last week with the shock announcement of a referendum initially and with the announcement over the weekend that a new ‘government of national unity’ will be formed and Prime Minister George Papandreou will step down when the deal is finalised. Over the weekend it was also announced that the European Central Bank could stop buying Italian bonds if it concludes that the country is not adopting the necessary austerity measures. It is a relatively quiet week for data, but there is a meeting of European Finance Ministers today that could see some movement. Call in now for a live exchange rate.

In the USA, the US dollar strengthened against ‘riskier’ assets on Friday as investors positioned themselves against potential losses ahead of Friday night’s vote of confidence in Greek PM George Papandreou. The US currency is experiencing strength related to a lack of confidence in the global recovery and could yet see further strength in the coming weeks so call in now to avoid losing out.

Elsewhere, there is a wide array of data released in China which many analysts expect will lead to the Chinese authorities removing some of their more restrictive policies. In particular, inflation is expected to drop and industrial production is also set to fall. Exports to Europe only account for around 15% of Chinese exports so the euro zone crisis is not expected to have too much of an impact. Call in now for a live exchange rate.

Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/