Greece back in the limelight, weighing on the Euro

Throughout this past week, the USD and higher yielding currencies such as the AUD and the NZD enjoyed renewed support while Gold met investors' disaffection.

Euro: The single currency was negatively affected by German Finance Minister Wolfgang Schaeuble's rejection of the proposal of Greek debt restructuring. Last week, the Euro also came under pressure following a Greek court ruling that a new pension reform demanded by its international lenders may be unconstitutional.

On the data front, last week the publication of a Consumer Sentiment index that hit its lowest level in three years reminded investors that European growth remains sluggish.

Furthermore, the single currency is coming under renewed pressure from Greece - where a crucial parliamentary vote is expected this week and which could have a bearing on the country's future within the common currency bloc.

Prime Minister Samaras will submit new austerity measures, labor reforms and the 2013 budget this week that must be approved in order for the ailing country to receive aid from its international lenders.  Samaras said that talk of Greece exiting the Euro will end irreversibly as soon once the new measures are passed.

The ECB is expected to hold its policy meeting this Thursday no changes are expected with regards to the policy rates.

US Dollar: It is interesting to note that despite Hurricane Sandy hit the East Coast of the United States and brought New York and Washington to a standstill, the US Dollar managed to close the week higher against most of its major counterparts, lifted by a faster and stronger economic recovery for the world's largest economy.

Hurricane Sandy forced Wall Street to close throughout Monday and Tuesday last week - this was the first time since 1888.

Despite the uncertainty brought about by what seems to be a tight race for the presidential elections being held in the United States this week, the greenback managed to hit a two-month high against a basket of currencies (DXY). The US Dollar was lifted by strong economic data out of the US last week.

Indeed, the USD hit a two-month high against most of its major counterparts following strong Non-Farm Payroll (NFP) data that was published last Friday. The data continued to portray an improving global economic recovery. Out at 171k compared to an upwardly revised 148k throughout the previous month and consensus figures pointing towards a 125k, data lifted hopes on the back of the more jobs added throughout the month of October. Demand for the greenback was spurred by speculation that a stronger economic recovery may lessen the need for quantitative easing.

Risk appetite was lifted by positive US data while the Japanese Yen experienced selling pressure.

Looking forward investors' attention will inevitably be on the imminent US elections with results expected to be announced on Tuesday.

The British Pound: At the beginning of the week, the British Pound benefitted from speculation that the Bank of England (BoE) would refrain from adding further monetary stimulus to the economy. In addition news that the Swiss National Bank decided to increase the allocation of British Pounds in its foreign-exchange holdings to 7% from 3% also helped support the cable.

The BoE is expected to stay on hold at least until its policy meeting later this week. The majority of analysts expect no changes of policy to come out of the meeting either.

Throughout last week, the UK's PMI manufacturing for the month of October showed that the manufacturing sector in Britain contracted more than expected in October, the data is issued by Markit Economics. PMI manufacturing shrank to 47.5 from a revised 48.1 (previous 48.4) versus consensus for 48.0. To the contrary, construction activity rose higher than expected in PMI construction data released last Friday. The construction sector recorded an expansion in October, after posting a contraction the previous month. Actual data showed that the UK PMI construction rose to 50.9 versus consensus for 49.0, from 49.5 the previous month.

The Aussie and the Kiwi: The Aussie, the Loonie and the Kiwi (AUD, CAD, and NZD respectively) met strong demand in this context of improved risk appetite. The AUD/USD hit a five-week high at 1.0419 on Monday while the NZD/USD jumped to a month high at 0.8279.

Furthermore, the RBA is expected to reduce its interest rate by 0.25% to 3% in its meeting this week.

Gold: Gold met investors' disaffection, losing more than $100 at $1'679 after its peak at $1'795 hit on 5 October.