Phrases such as ‘better the devil you know’ and ‘the lesser of two evils’ may have been scribbled in the tattered moleskin diaries of a few sterling traders last week. Keeping that theme in mind, an eternity in flames may have provided a more favorable option to those expected to vote this summer, as the British public seem well and truly stumped, which could result in a hung Parliament – which doesn’t bode well for sterling.

However, some believe a weak pound isn’t necessarily a bad thing for the economic recovery, despite a gaping black hole of debt and fiscal infection so shameful, you’d stay at home with the doors locked and the curtains shut tight just to hide it.

Last week saw the pound making depressing nosedives in form due to an unhealthy diet of economic data. Weak weekend polls and another unwholesome helping of the same on Tuesday morning left the pound sluggish as a result of political uncertainty. However, a refreshing dose of PMI data reversed these losses to keep sterling steady before an unchanged decision on interest rates and QE gave rise to a whole lot of nothing on Thursday. It’s advisable to keep a close eye on the political pendulum as the election approaches, as it will have a significant say as to how far sterling will go against other majors in the coming months.

The suspect scent of schadenfreude could be detected outside German Chancellor Angela Merkel's office at the weekend, as the European juggernaut suggested that Greece could perhaps part with a few islands to curb their debts and maybe stick the Acropolis on EBay just for good measure. German newspaper Bild echoed the Chancellor’s discreet intimations with the headline “Sell your islands, you bankrupt Greeks! And sell the Acropolis too!" Comments from French President Sarkozy were a little gentler "If Greece needs help, we will be there" he said reassuringly, whether or not this will be with a wad of cash or a blueprint for an incursion of Crete was unclear though.

Chatter about a Greek support plan kept the euro steady last Monday but it slid on Tuesday as Greece began to outline further spending cuts. By Friday, the ECB decision to keep interest rates at their record lows spun the single currency back into downward descent. However it isn’t looking quite as bad as it was, the markets are breathing easier over the Greek fiasco with new austerity measures viewed favorably. Whether or not a support package will turn out to be a Trojan horse remains to be seen – more on this next week.

Which leaves us with a little room for the dollar, which had a slightly bearish week, ending well with solid Non-Farm Payrolls data. With the Trade Balance and Retails Sales due along with weekly Unemployment Claims and Consumer Sentiment reports, maybe this week’s news from the US will warrant a little more space on our market-shifting update – fingers crossed.

Have a great week