The key driver for the markets this week is the Greek austerity measures. As the Greek parliament debate the proposed measures later today PM George Papandreou has said that only his 28bn-euro (£25bn) austerity plan will get Greece back on its feet. If the measures are not approved then Greece would run out of money in a matter of weeks causing the country to default on its debts.
Christine Lagarde, France’s Finance Minister, has been named the first woman to head the International Monetary Fund (IMF). Ms Lagarde said in a statement: “I will make it my overriding goal that our institution continues to serve its entire membership. As I have had the opportunity to say to the IMF board during the selection process, the IMF must be relevant, responsive, effective and legitimate, to achieve stronger and sustainable growth, macroeconomic stability and a better future for all.”
Adam Posen continued to display a dovish stance on inflation, causing interest rate expectations to be pushed further back on concerns over the UK economic outlook.
Sterling declined against the majors dropping to just below 1.11 against the Euro and to a twelve week low against the US Dollar below 1.60.
Following a weaker sales figure, the Swedish Krona fell to the lowest level in seven months. Steven Englander, head of Group of 10 currency strategy at Citigroup Inc. in New York said “You saw Sweden react to weak retail sales, but the impact of data is much more limited than is normally the case.”
For anyone wishing to sell Sterling with everything considered it might be worthwhile taking a sooner rather than later approach to purchasing your currency.