The Euro is enjoying a healthy bounce after the completion earlier in the week of a further Greek bailout to cover March debt obligations and through positive German data. Data from Germany showed that GDP had shrunk in Q4 by 0.2%, however strength in recent ZEW and IFO surveys suggest that the economy will escape falling into recession.

The Euro was also helped by good news from over the pond as weekly US jobless claims came in unchanged at 351k and this level remains the lowest since 2008. This number has helped to boost the expectation that the approaching Non Farm Payrolls on Friday 9 March will better than market expectations. Recently US data has started to show signs of improvement as the powerhouse that is the US economy looks as though it is slowly clawing back to growth. For the markets this improves the appetite for risk and currently this is USD negative. We have seen EUR/USD especially push higher and test 1.34- the highest level since December, GBP/USD has also edged higher but the pound remains a little subdued.

Wednesday’s MPC minutes helped to put a dampener on the pound as expectations rose for further QE in 2012- probably in May. With inflation falling and economic growth struggling then QE remains very much on the table with a cocktail of low interest rates to remain. The pound has fallen on the back of this market feedback and is struggling to gain momentum even in a sentiment which has turned risk on.

Today is a quiet day for data, although we do have the G-20 meeting over the weekend. Little is expected from the weekend meeting- the talks will be dominated by the European debt crisis and could involve discussions on IMF contributions.