Sterling briefly hit a fresh 7-year high against the euro in the early hours of Monday morning, as Greece lurched closer towards a default on their debt repayments. No significant economic data was released yesterday, meaning investors were free to focus on the escalating Greek debt crisis.
News broke over the weekend that Eurozone finance ministers had rejected a request to extend the Greek bailout past Tuesday, and that the European Central Bank (ECB) would not increase emergency funding to Greek banks. This pushed sterling up against the euro, although further worrying news from Greece throughout the day did not counter sterling giving back most of these gains throughout the afternoon as the euro recovered across the board. Perversely sterling performed better against the US dollar, as a strong euro recovery throughout the day affected markets elsewhere.
Today is likely to see investor focus still trained on the Eurozone, although the final confirmation of UK economic growth throughout the previous quarter should provide some local interest. Alongside this, the latest UK current account balance will also be released, and a modest reduction in the deficit is expected.