Risk aversion has returned to currency markets despite an agreement having been reached by Greece with its private creditors, says Peter Theuninck of Baydonhill FX.
The European Central Bank and Bank of England will remain in focus this week. Peter Theuninck, currency analyst at Baydonhillfx, surveys the outlook for the pound, euro and dollar.
Risk appetite remains at the forefront of currency market trends as this week begins, with progress having been made in Greece to secure further bail-out funds from the EU and thus avoid a debt default.
Sovereign debt concerns raised their head again over the weekend as Greece continues to struggle on reaching an agreement with private creditors of debt swaps and the losses to be taken by investors on Greek assets.
In addition to the focus on the European Central Bank and Bank of England meetings, the markets will continue to monitor bond auctions within the eurozone, with the dollar remaining a safe haven.
Expectations of a slow and protracted economic recovery will continue to put the pound under pressure, while euro traders will be awaiting guidance on the single currency's future from next weekend's European Union summit, says Peter Theuninck of Baydonhill FX.
Debt problems will not be ignored this week, but a number of major economic data releases will add to developing more independent currency movements, says Peter Theuninck of Baydonhill FX.
Markets are bracing themselves for a great deal more volatility this week, as uncertainty over a Greek default and contagion of sovereign debt problems to other regions within the eurozone has strengthened safe-haven demand, says Baydonhill FX's Peter Theuninck.
