Markets were relatively flat as a result of the UK bank holiday leaving the pound unchanged from Friday. There is very little data due on the agenda meaning the focus is likely to fall on the US dollar this week with a string of key economic fundamentals in the pipeline. The stand-out releases include the revised US Q2 GDP figure and Ben Bernanke’s Jackson Hole speech on Friday. Elsewhere, the euro will be looking to build on last week’s gains, however, investors are likely to be nervous ahead of the German consumer confidence index bearing in mind recent data releases. News surrounding Greece will also be eagerly anticipated as traders will be keen to discover if the debt-ridden nation has the full backing of the European Central Bank.

Sterling

Sterling remained relatively unchanged over the long weekend as investors return to their desks from the August bank holiday. With little event risk on the calendar, the pound is likely to follow developments in the eurozone. Bank of England consumer credit figures are due for release, which are expected to show decline.

US dollar

The dollar traded flat, with thin summer trade further subdued by the UK public holiday. Investors also refrained from placing big bets ahead of the week’s main event on Friday when Federal reserve chief, Ben Bernanke, delivers a speech on the economy and monetary policy at Jackson’s Hole. Two years ago, Mr Bernanke announced further quantitative easing measures; this time around, markets are braced for potential more quantitative easing.

Euro

Even though the eurozone debt crisis continues to dominate headlines, the single currency enjoyed weekly gains against both sterling and the greenback. The catalyst for these gains was growing optimism that the European Central Bank would initiate a quantitative easing facility that would cap Italian and Spanish bond yields. This week, eurozone debt worries may take a backseat to expectations for a further easing of the US Federal Reserve’s monetary policy, a move that would keep the euro within striking distance of multi-week highs against the dollar. In the meantime, the euro’s recent gains are likely to be tested by a raft of data on eurozone economic sentiment and German numbers on business confidence and inflation.