USD - The USD begins the week mixed against its major counterparts as all eyes are on Greece after European officials approved a second bailout package for the debt stricken nation. However, serious concerns remain that while the infusion of cash will avert an imminent disorderly default, the measures do little to address the underlying economic deficiencies that put the region's weaker economies in such a predicament in the first place. As such, the USD remains relatively well entrenched within its recent ranges, albeit towards the lower end with little major economic data due to provide additional support. Investors will take note of key housing and labor market data this week with mortgage applications and existing home sales both due tomorrow, and weekly jobless claims and the house price index slated for Thursday. The week closes out with University of Michigan confidence and new home sales on Friday. While the European developments are a welcome relief, the USD's appeal will remain largely intact in the near term with its safehaven status drawing demand.

EUR - The euro was supported after Eurozone officials threw Greece a lifeline following marathon negotiations yesterday, agreeing to terms for a rescue package. The euro revisited recent peaks vs. the dollar at $1.3296 as relief that Greece will be able to avoid disorderly default helped the single currency rebound from last week's lows below $1.30. Under the terms of the EUR 130 billion rescue package, Greece committed to additional austerity measures while bondholders agreed to take larger losses. Bondholders will take losses equating to 53.5% of the bond's value, up from 50% previously. Greece also agreed to permanent surveillance of its budgetary progress by external authorities to ensure measures are carried out. Although the rescue package enables Greece to avert default ahead of its next round of bond payments in March, many hurdles remain. Euro gains were tempered today by doubts that Greece will be able to implement the deeply unpopular austerity measures as elections loom in April. Additionally, with Eurozone GDP reported declining ?0.4% in Q4 last week, the region faces stiff hurdles in overcoming its challenges.

GBP -The GBP is lower against both the USD and EUR after the approval of the Greek bailout package prompted investors to assume riskier positions. Nevertheless, sterling remains within its recent ranges after the British government budget surplus widened by more than expected with demand for the relative safety of British government assets remaining relatively high. In the week ahead, investors will pay particularly close attention to the most recent reading of British GDP due on Friday with the consensus expecting a 0.2% contraction QoQ.

JPY - The JPY continues to weaken on the back of last week's BoJ announcement of the asset purchase program. Despite the slowing rate of contraction, a shift in the country's current account will continue to add pressure to the yen. The USD/JPY is ranging at a record 6?month high but with limited data in support of the JPY this week it is safe to assume that the yen will remain within ranges.

Commodity Currencies - Canada's dollar weakened versus the USD after data showed retail sales fell in December and currencies of commodity?exporting nations slid on concern a bailout hasn't resolved Greece's long?term debt crisis. The loonie slipped 0.2% to 99.51 cents per USD in the morning session after touching as low as 99.76 cents. Retail sales declined 0.2% in December, falling for the first time in five months. The Australian and New Zealand dollars were among the worst performers today among the USD's 16 most?traded peers tracked by Bloomberg. Australia's dollar fell after RBA said there is scope for easing should demand weaken materially. The Aussie and New Zealand's Kiwi trimmed declines after euro?area officials reached agreement on providing Greece with a second rescue package. Demand for the South Pacific currencies was limited after technical indicators suggested recent gains were excessive.

MXN - The Mexican peso remained steady last week as Q4 GDP figures fell in line with expectations. Mexico's Q4 GDP grew by 0.42% q/q to 3.7%, while the annual figure reached 3.9% for 2011. There were some moderate slowing in productive activities toward yearend, however, secondary activities expanded at a 3.2% annual rate, off from a 3.5% in the previous quarter. With an increase in positive sentiment on Eurozone's debt crisis and the US's growth, the peso should be lifted on temporary risk taking flows.

RMB - CNY fixing came in higher at 6.2960, with the onshore spot opening at 6.3019. While the offshore market, CNH, opened close to 6.2980 and pushed higher. The moves come after China announced a reserve requirement ratio (RRR) cut by 50bps. This cut is the second in almost 3 months and highlights China's skill in controlling liquidity in the world's second largest economy. Look for the RMB to continue on its strengthening path the remainder of the week.