The global economy is emerging faster than expected from the deepest recession since World War II, finance ministers from the G20, representing the world's leading economies, said over the weekend. After talks in Washington, they said the pace of the recovery was largely due to the huge amounts of government money pumped into national economies.

Sterling

Sterling reached three-month highs against the euro as the main driver behind the pound's hikes was the general bout of strong economic data showing an improvement in the UK economy. Thus hopes for an announcement that quantitative easing measures have ended and that Bank of England will begin its policy normalisation sooner rather than later have also increased.

US dollar

The US dollar finished in mostly positive territory at the end of last week, benefiting from the broad rise in risk aversion associated with mounting sovereign credit concerns in Europe. Soaring credit spreads highlighted the market's growing lack of confidence in Athens' ability to finance its deficits and ultimately forced Greece's government to officially seek financial aid from the EU and IMF.

Euro

The euro fell back to the lowest level in nearly a year, after Moody's downgraded Greece's credit rating. Developments in Greece still seem to be driving the foreign exchange markets with uncertainty over funding and the potential for the economy to default keeping risk appetite limited and safe haven currencies such as the US dollar well supported.

Japanese yen

The yen is still benefiting from safe haven inflows into the economy. This was interrupted by comments from Fitch, a rating agency, that warned that Japan's sovereign credit rating could be at risk. The announcement came just after news was spread that the Bank of Japan could raise its growth and inflation estimate at next week's Monetary Policy Committee meeting.