Euro rises as markets open on positive note from Greece, pound falls as retail sales disappoint

The euro strengthened across the board as European markets opened on 23 July helped by good news from Greece and Spain but the pound Sterling dropped off as retail sales data came in weaker than expected.

EUR/USD rose to a high of 1.1004 in Europe morning from near 1.0930 during mid-Asian trades while EUR/GBP jumped to a one-week high of 0.7058 from 22 July's close of 0.6999.

GBP/USD that was trading higher on the day, dropped to 1.5583 from the day's high of 1.5672 immediately after the sales data, also falling below the previous close.

The Spanish unemployment rate has fallen to 22.4% in the second quarter of this year, down from the first quarter rate of 23.8%.

On 22 July night, the Greek parliament voted in favour of a second set of reforms, this time covering the banking and judicial sectors. The first set of reforms dealt with VAT and pension systems.

Analysts note that Greece can now start negotiations on the €86bn package and a successful completion of the same would prove to be a great relief for the country.

At the same time, the market is still cautious about the progress of the bailout process and evolving political scenario in Greece that has a strong bearing on the implementation of any austerity-bailout package that finally comes into effect.

"The EUR/USD is still trading below 1.1000 and traders remain concerned about the sustainability of the bailout plan," said Yann Quelenn, market analyst at Swissquote Bank.

In June, retail sales in the UK grew 4.0%, slower than the 4.7% growth of May while analysts had been expecting a higher rate of 4.9%. Month-on-Month, sales fell 0.2% when the forecast was for a repeat of the previous month's rate of 0.3% growth.