Retail sales disappoint for the Pound

Yesterday’s main UK data came in the form of retail sales figures for the year to May, which came in slightly below expectations at 4.6%. The announcement put the brakes on the recent rise of the Pound, which had been creeping back up, and exchange rates for most major currencies were flat for much of yesterday’s trading.

US inflation figures in the afternoon came in lower than expected, but failed to send the US Dollar to any cheaper levels. Rates for buying both the US Dollar and the Euro are currently around their best in recent months however, with the single currency in particular struggling amid the political crescendo building around Greek debt. Elsewhere the Swiss interest rate was kept on hold at -0.75%; interestingly the Swiss Franc has now lost over half the sudden gains it made in January when the Swiss National Bank removed its cap against the Euro – good news for those of you sending money to Switzerland.

Deadline Day looms for Greece

Another day with no progress – a meeting between Eurozone finance ministers ended yesterday without an agreement on reforms in Greece necessary to unlock further bailout funds. Without a deal, Greece is likely to default on its debt repayments due at the end of the month, and could then have to leave the Euro.

Those of you waiting for the Euro to lose value are perhaps playing a dangerous game however. The Greek people and government, and German Chancellor Merkel, are all aligned in their desire to keep Greece in the Eurozone and with 11 days still to go there is plenty of time for a deal to be struck. It seems extremely likely that this would provide markets with certainty over the future of the single currency and increase its value, perhaps significantly. We have not seen the Pound break through the €1.40 for more than a couple of days in recent months, so if you are holding out for that rate, bear in mind that accepting a rate close to your target could prove to be a wise decision. Moments of enormous uncertainty such as we have now, often prove to be good times to buy – and predicting market reaction to a default is also no easy feat.

Eurozone leaders will meet on Monday to try to find a solution.

Canadian inflation to finish the week

Today’s only important data comes from Canada, where inflation figures are announced at 1.30pm UK time. Next week is then extremely quiet in terms of scheduled data, so the Greek story is likely to be the dominant factor for exchange rates, for the last full week’s trading in June.