Big Week Ahead In The Currency Markets

Having dipped below the 1.50 mark against the dollar again this morning, the pound looks like it's in for another volatile week.

Monthly inflation figures are due to be published tomorrow, with analysts expecting the consumer prices index (CPI) to have eased back to 3.1% for February after hitting 3.5% in January.

The increase, up from 2.9% in December and a low of 1.1% last autumn, was driven in part because of the end of lower VAT.

The Bank of England's government-set target for inflation is 2%. The Bank say that they expect things to dip back to this kind of level later in the year.

If they don't the the BoE may ultimately have to consider raising rates in order to meet its target.

We have the budget to look forward to on Wednesday, where the caterpillar eyebrowed one will outline exactly how he's going to cut borrowing, and pay back some of what we already owe. Of course in the run up to an election he's got a bit of a tightrope walk to do.

Greece is finally likely to be told politely but firmly to "do one" by EU minsters meeting at their summit on Thursday/Friday, before getting straight onto their mobile phone to the IMF.

We can probably therefore expect both the pound and euro to come under pressure as the week progresses.