Sterling finished the week with a strong rally against the US dollar, with positive sentiment over the Greek debt situation resulting in investors willing to move from the US dollar. However, this same sentiment saw sterling slip to the lowest level in almost a month against the single currency.

The week ahead promises to bring a greater focus on UK economic data. The Bank of England (BoE) credit conditions survey was scheduled to be released Monday, and will include data on lender confidence. Tuesday’s release of June inflation data is likely to carry more weight, and is expected to show a second month of modest inflation at 0.1 percent. Core inflation (discounting volatile energy & food prices) should show a much healthier 0.9 percent figure.

Moving into Wednesday, average earnings data will be released.

Following a troubling start to the year, this data has shown a significant improvement over the last few months, suggesting that slack in the job market is being taken up. A further increase to 3.3 percent growth would increase calls to consider an interest rate hike. Alongside this will be release of the latest unemployment rate, which should remain at a six-year low of 5.5 percent.

BoE Gov. Mark Carney will round off the significant releases from the UK economy on Thursday as he speaks at Lincoln Cathedral. As ever, investors will be listening intently for any hints as to future monetary policy from the central bank.

It was a good week for the euro against sterling and the US dollar, rallying by over 1 percent to fresh one-and-a-half week highs against the US dollar on Friday. Progression on the Greek debt front boosted the demand for the single currency as it continued to strengthen against the majority of the main currencies after the Eurogroup described Greece's latest proposals aimed at securing a vital bailout as "thorough". This was exactly what the European finance ministers were looking for.

Detailed discussions have taken place over the weekend and have involved both the leaders and finance ministers of the Eurozone member countries. I think to describe them as tough would be an understatement but progress has been made and it appears that agreement, subject to parliamentary votes, is getting ever closer. The deadline for sign off by the Greek parliament is apparently Wednesday which wouldn’t be a day too soon given the parlous state of the Greek banks which are apparently days away from collapsing. So hopefully, we are in the final throes of this stage of the debt crisis which will allow the Greeks to get on with living their life.

The dollar remained broadly lower against a basket of other major currencies on Friday, as hopes for progress in Greece debt negotiations continued to support demand for riskier assets.

Those in favor of a strong dollar and keeping an eye on the market for future US dollar strength should ultimately take comfort in a Greek deal for more cash, as that would reduce global uncertainty and give the Federal Reserve more leeway to raise interest rates.

On Tuesday we will see the release of core retail sales figures, expected at 0.7 percent, a slight reduction from the previous figure of 1 percent. PPI data is released on Wednesday — this is likely to see a drop down to 0.2 percent.

Thursday sees US Federal Reserve Chair Janet Yellen discussing semi-annual monetary policy.

Finally, on Friday we have the release of CPI data, which is an indicator of inflation. This is expected to stay roughly the same as before — however, a change in the price of goods and services produced could spell short-term trouble for the dollar.

— Charles Purdy is director of Smart Currency Exchange.