Most of the markets and equities have rallied after the European officials and Mario Draghi have pledged to do 'everything' to protect the Eurozone. The markets interpreted this as a move for the ECB to restart their bond-buying programme in Spain and Italy, and the Euro gained some strength after its dismal showing last week. This has also lent some respite to the surging Italian yields for 10-year bonds to under 6%. However after yesterday's news from Spain that economic growth had contracted, the dollar gained some strength against the euro, which still seems structurally weak, as sentiment in the Eurozone drops to a 34 month low in July.

There are 3 Central bank meetings this week, namely the BOE, ECB and the Fed and there is a lot of speculation about quantitative easing with all economies. However, since Draghi's announcement of ECB support, the Euro has managed to stay on lower levels of volatility. The Troika have remained in Greece for now to ensure politicians agree to the €11.5 billion worth of cuts, in order to hand them a €130bn bailout. Having range traded in a 60 point range early this week, the euro faces another set of data releases today including unemployment figures, inflation data and German retail sales.

The pound has been fairly quiet this week ever since it strengthened against the Greenback, with most of the headlines being grabbed by the Olympics for now as we await the Bank of England meeting. Most economists expect that they will continue to hold on current policy in August, but there is growing speculation that they may need to act faster than they planned to, within the quarter. Not much concrete data for a rally against the Greenback, as any break above the current 1.57 levels is facing some resistance, as markets await the Fed meeting tomorrow, which should give the pair some direction.