After ending last week at the bottom of the pile, Sterling has moved to the top, accompanied by the Canadian Dollar while Sterling’s spot at the bottom has been taken by the Australian Dollar (cricketing similarities??).

Overnight, the People’s Bank of China (PBOC) surprised financial markets by announcing a “one-off” 1.9% devaluation if its currency against the US Dollar and a new method of managing its value. Instead of being set by the PBOC, the daily anchor for the Renminbi’s permitted 2% range will in future be determined by the previous day’s closing price. With slower growth in China it will mean further downward pressure on Chinese import prices and therefore on commodity-producers’ export prices.

In the US, two Federal Reserve leaders spoke yesterday. Atlanta Fed president Dennis Lockhart failed to reiterate his hint that US interest rates will begin to move higher next month and vice-chairman Stanley Fischer was lukewarm about a September increase. The dovish tone saw the US Dollar fall by three quarters of a cent against Sterling.

This morning we have heard reports that Greece has come to an agreement with its creditors and that a new bailout would happen. (the Euro strengthened on the news).

The deal will provide Greece with €86bn on the 20th August from the ECB, IMF and EC which will enable Greece to make a €3.3bn repayment to the ECB on the 20th of this month (the irony) and should make future such payments achievable too. Inevitably there are doubts about the longer-term viability of Greece but for the time being, investors seem more comfortable about the Euro with a deal in place than they were in the absence of one.

Today’s ecostat agenda lists Italian inflation, German business confidence and very little else. That will allow investors plenty of time to ponder the Fed, China and Euroland.