The forex markets are extremely cyclical at the moment, from one week to the next we are seeing wild swings in sentiment. Last week focus fell on the Pound and a host of negative news forced the Pound lower against the majority of the world’s most actively traded currencies. This week it would appear that focus has now shifted towards selling the Euro.

Sentiment in the eurozone has been undermined by a slump in support for German Chancellor Angela Merkel’s party in the recent elections. This election result is distinctly Euro negative as concerns mount over concerns with the way Mrs Merkel’s party has dealt with the recent Greek debt crisis. These concerns fall at a time when talks have just been suspended between the Greek government, the IMF and ECB. The suspension has been caused over terms associated with the issue of new bailout funds, the primary disagreement is how the Greek government should be going about reducing their widening budget deficit gap.

The market is extremely risk averse at the moment and this is not helping the euro’s situation either. Friday’s Non-Farm Payrolls figure highlighted the current weak pace of the US economic recovery. The US economy is by and large considered to be the leading indicator to other world economies and the NFP result has sparked fresh concerns that we could all be in for a rocky road for the next year especially for those looking to send money abroad.

Markets this morning will turn to the UK & Eurozone CIPS services survey, other figures include the Sentix Investor sentiment Index and July retail sales figures from the Eurozone. The Pound trades lower against the Dollar in opening trade on the fall out from risk aversion caused by Friday’s NFP. The Pound is gaining against the Euro trading through 1.14 on fresh sovereign debt crisis concerns.