Last week Sterling’s surge

It was a very productive week for the pound as it reached its highest level against the euro in 3 months. Two consecutive days of positive economic sentiment were the driving force for the pounds’ surge, especially Thursday’s retail sales figures, which came out much higher than expected.

Over the weekend, finance ministers met in Japan ahead of the G7 meeting on the 26-27^th May. It was a meeting which saw the US and Japanese disagree over the current financial market movements, with Washington stating that Tokyo has ‘’no justification’’ to intervene on the currency markets to stem Yen gains, given the currency movements remain ‘’orderly’’.
 
Greece approves Austerity measures
With the Eurozone finance ministers meeting in Brussels on Tuesday, Greece is on the brink of receiving a much needed bailout after the government agreed to the latest batch of austerity measures. The Greeks hope that by accepting these latest measures, it will help unlock the funds it needs to pay IMF loans and ECB bonds coming up. By doing so, fears will be eased all across Europe of another summer of chaos, where Greece’s struggles to meet debt repayments sent the Euro into freefall.
 
This week data, from potential volatility to speculation
The coming week is fairly thin on the ground as far as major data is concerned, although the global flash PMIs will be released today and may provide some volatility. Tomorrow, we have Q1 GDP and German/EU ZEW economic sentiment survey which is forecasted in slightly higher than previous. From the US, later in the week, we have Durable goods orders out on Thursday and GDP figures out Friday. Should we see a strong reading from these figures, speculation could further grow amongst traders of a potential June rate hike from the Fed.