The Greek recovery package is far from sorted as the German Chancellor indicates it should only come with tough conditions.

Pound Sterling – UK Markets

Following Sterling’s gains on the Euro yesterday, the pound has weakened slightly against the Euro so far this morning although this is still relatively high for recent weeks. New UK housing market figures may have shaken the pound this morning. The UK Mortgage approval rate has grown by 1.6K in March, greatly underachieving against market expectations of 10.0K. As media focus in the UK surrounds Liberal Democrat leader Nick Clegg and any indication of which of the other two main parties he may or may not support in the event of a hung parliament, Sterling is likely to show a response as we enter the last ten days of election campaigning.

US Dollar – US Markets

The US Dollar has strengthened against both the Pound and the Euro so far this morning. The Dollar is benefiting from its recent set of positive data as well as weakness in the Euro. Further data due to be released this week is likely to illustrate that the economy is gathering momentum. New statistics have already revealed that consumer spending has increased in the last quarter at more than double the rate than in the previous three months.

Euro – European Markets

The single currency is still overwhelmed by the ongoing Greek debt crisis, as Germany faces criticism over its reaction and fears strengthen that a clear-cut aid package may still not materialise. In the run up to the German election, Angela Merkel the German Chancellor, has publicly stated that German support to a European help package will only be offered on the condition that structural reform and budget changes are imposed on Greece. As German protesters hit the streets over having to bail out Greece, the Chancellor also made clear that the reason for the package was to protect the Euro in the long term. The immediate effect of these comments however has been to undermine investor confidence in the single currency. Yields on both Greek and Portugal’s bonds have surged as concern rises that Greece’s credit worries may spread to other EU countries. Greek transport workers are also set to go on strike today. The Euro traded near to a three month low against the Pound yesterday although so this far morning the pound has weakened slightly.

Other Currencies – Highlights

Goldman Sachs is due to undergo a hearing with the U.S Senate subcommittee today at 10am in Washington following last week’s allegations. This hearing could be critical to the future of the financial industry. The Yen has strengthened against higher-yielding currencies and is benefiting from Greek troubles as a safe-haven currency.