Caution ahead of EU summit today

EU leaders are meeting in Brussels today and are likely to sign off a new permanent rescue fund and balanced budget rules, with unresolved Greek debt concerns casting a shadow over proceedings.

Markets are cautious ahead of the results. While one could expect to see Euro strength based on a new stability pact and rescue fund, the lingering problems over Greece may stop the Euro from gaining too much value. Nevertheless we could see exchange rates for buying Euros start to slip back (Euro strength) as the day proceeds.

Elsewhere the only significant data out today is US personal consumption and expenditure at 1.30pm UK time, so currency markets are likely to be dominated by events in Brussels.