The concessions made yesterday by euro zone governments in a deal to bailout Greece and support weaker economies were more broad based and varied then what markets have seen in the past. The agreements made at the emergency summit yesterday saw a renewed faith in the euro from investors. Attention will now turn to the other side of the Atlantic where budget negotiations are still at a relative impasse. Not only are negotiations encumbered, but also S&P reminded markets yesterday that not only should the debt ceiling be raised by August 2nd, but also deficit reduction measures need to be seen as adequate. The rating agency put the chances at 50/50 to see a rating downgrade, which will likely continue to weigh on the dollar headed into the weekend. Economic data for today is concentrated in the euro zone where new industrial orders as well as French and German business sentiment surveys will be released. The surveys are expected to see small losses over last month’s data, while new orders are also seen moderating. In the UK, Cable was able to ride to coat tails of a stronger euro/dollar. Economic data released showed a pick up in retail sales and lower public borrowing which supported the positive move; however, sterling losses were seen against a rising euro. Investors will begin to focus on next week’s Q2 GDP release, not only in the UK, but also in the US.

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