With no significant data releases to support sterling, it had a tough start to the week falling slightly across the board. However, this morning it gained some ground against the euro as markets opened in Asia.
Sterling slipped throughout yesterday morning as news emerged that the Greek government had brought a new set of proposals to the negotiating table. With the prospect of a deal to restructure Greek debt looking distant last week, the positive sentiment – echoed by both the European Union and Greek government– was positively received by the markets. This saw many of the previous week’s gains versus the euro wiped out. However, given that reforms are seemingly dependent on a Greek parliamentary vote, there remains ample room for further problems to arise.
Sterling also struggled against a resurgent US dollar, where the level of new US home sales grew in May at the fastest rate since November 2009.
Another quiet day lies ahead for sterling on the data release front, with a survey of industrial order expectations representing the only fundamental data released from the UK. With this likely to have little significant impact, we again look elsewhere for any indication of movements, with French and German manufacturing orders likely to provide an early test for sterling.