Such an event would be a further negative for the euro.

In her 'Friday Forecast,' Eimear Daly, Market Analyst at Schneider Foreign Exchange says:

"The story of next week could have been so different. Tuesday was the defining deadline to default on or honour Greek debt. It was the difference between the Eurozone being permanently weakened, or surviving to face the next phase of recovery. Thankfully for the euro – and for equity markets – a hasty and turbulent bailout deal was pieced together and a bond swap completed. Tuesday will now probably pass unnoticed, despite being the date that held so much weight for so long.


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"A Portuguese bond auction on Wednesday will now be the main event for the euro area this week. After the markets attacked Portuguese debt following the LTRO announcement, Portugal’s bond market is firmly in focus. A disappointing take up, or higher yields, are the market’s way of saying that Portugal is next in line for a debt restructuring. News from Europe has been unusually quiet of late, but as Merkel said, we are half way up the mountain, not over it.
 
"The recent positive US data has changed everything. The dollar trades firmer, equities are bounding and US interest rates are up. Rightly or wrongly, everyone is buying into the US strength story. But next week sees the release of reports on the US housing market, the Achilles heel of the US economy. The aftermath of the sector bubble damaged confidence and now makes for a slow recovery. However, signs of recovery have emerged. If these continue into next week, we will see dollar upside, all the way up. Any positive comments from Bernanke during the week will only add to this. 
 
"The week will also bring the policy dynamics of the UK economy into focus. So far monetary easing, balanced with fiscal tightening, has led to a slow recovery – if it even deserves the term “recovery”. Two rating agencies have threatened the UK triple A rating and we are only a quarter of negative growth away from recession. The UK economy is walking a tight rope.

"The UK inflation figure out on Tuesday will be a test of our monetary easing, while the Public Sector Net Borrowing Requirement will be a test of ongoing austerity measures. The Bank of England minutes and the Chancellor’s Budget speech, both on Wednesday, are likely to give some insight into how the situation is progressing. Inflationary risk and an even greater drop in the Public Sector Net Borrowing Requirement may mean we are nearing the point of swapping monetary easing for fiscal easing."