Domestically, the economic calendar is fairly light for the week. Developments from Greece will continue to dominate headlines with a highly influential Euro group meeting scheduled later today.

The Euro zone is set to release its flash report on consumer confidence today, while the week will also include closely watched reports such as German consumer sentiment, and manufacturing and services PMI numbers for the Euro zone and its various economies. Across the Atlantic, two reports on home sales are due this week. Additionally, first quarter growth and durable goods orders in the US will attract significant market attention.

Pound Sterling – UK Markets

With limited data out this week in the UK, the Pound is likely to be influenced by rising speculation that the Bank of England might look at raising the record low interest rate as the economy gets back on a firmer footing. The BBA mortgage approvals data due mid-week is expected to attract significant market attention as it will provide clues to the strength of the residential real estate market. Moreover, the Confederation of British Industry’s survey on industrial trends and on UK’s retail and wholesale distribution sector will be noted to gauge the overall performance of the economy in the second quarter.

On Friday, the Pound traded broadly higher against the US Dollar and the Euro, as the recent upbeat domestic economic data have strengthened views that the BoE is on course to tighten monetary policy. Sentiment for Sterling improved at the end of the last week after a report showed that Britain recorded its smallest budget deficit for any May since 2007, led by a rise in income tax revenue.

US Dollar – US Markets

The US Dollar is trading on a stronger footing against its key currency counterparts, ahead of a pair of key economic releases, starting with the Chicago Fed’s national economic activity index, to be followed by an update on existing home sales numbers, both for May. The Chicago activity index has been hovering in negative territory since January, and investors will eye today’s data for confirmation of a stronger rebound of the economy in the current quarter. In the US real estate market, steadily improving fundamentals, such as the surge in employment and wage growth, point towards a healthy market. Accordingly, markets anticipate a rebound in today’s existing home sales numbers. Traders will also look for more good news in tomorrow’s new home sales report.

On Friday, FOMC member and president of Federal Reserve Bank of San Francisco, John C. Williams stated that the US Fed would probably raise rates twice this year and expressed confidence that the inflation rate will move closer towards the central bank’s desired target.

Euro – European Markets

The Euro has retreated against the US Dollar from its early session highs. It had initially edged higher against the major currencies this morning, and had crossed the 1.14 mark against the US Dollar amid hopes that Greece might avert a debt default at the end of this month. The Greek government showed fresh willingness to unlock aid and break the deadlock with its international creditors after its Prime Minister, Alexis Tsipras submitted new proposals on Sunday. The Euro is expected to experience significant volatility in the remainder of the trading session, with investors treading cautiously as talks between Greece and its bailout creditors enter the final stretch, amid an emergency Euro zone summit to be held later in the day.

Apart from this crucial meeting, investors will keep a tab on the flash measure of Euro zone’s consumer confidence which is scheduled later today. The result will provide a peek into whether the Greek debt crisis has dented sentiment in the Euro region, despite recent economic data signalling modest recovery in the economy.

Other Currencies – Highlights

The New Zealand Dollar has retreated from its early session highs against the US Dollar and is trading below the 0.69 mark. The Kiwi Dollar had come under broad pressure last week after economic data showed that New Zealand’s economy expanded well below the market forecasted pace in the first quarter. A few economic releases in New Zealand during the weekend have influenced trading in the Kiwi Dollar to US Dollar currency pair. Consumer optimism in the second quarter in the nation softened amid fears of an adverse impact of a continued decline in commodity prices on the economy. Meanwhile, a surge in net migrations for May indicated strong visitor growth extending well past the traditional holiday season.

Currency traders will now look forward to upcoming data in the US later today, which includes the Chicago Fed’s gauge on activity in the US economy and a report on existing homes sales for the previous month.