Eurozone finance ministers are due to meet today to decide whether Greece has done enough to merit its second tranche of bailout funding. Greek Prime Minister, Lucas Papademos, was in Brussels over the weekend to try to clinch the €130 billion deal and reassure Eurozone officials that sufficient austerity measures will be put in place. While some scepticism remains, at this late stage and after months of negotiations the markets are expecting the deal to finally be agreed. The euro remains well supported with further gains in EUR/USD over the weekend.
On Friday, the pound was buoyed by unexpectedly strong figures for UK retail sales. In January, the volume of sales (excluding fuel) rose by 1.2% in December while the markets were expecting a decline of 0.3%. This suggests that a softening in inflation and improved confidence have encouraged consumers back to the high street. On the back of these positive figures and a broader improvement in risk appetite, GBP/USD broke comfortably above 1.5800.
With the US markets closed for a public holiday, trading in the currency markets is expected to be thin which could potentially exaggerate any price moves in trading today.
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