Turmoil in the Eurozone continued to rule the roost in foreign exchange last week, ensuring the pound (as a safe haven) gained ground once again against the Australian dollar. In particular, German and French proposals to forge a Eurozone economic council (in lieu of creating Eurozone bonds) disappointed the markets, prompting investors to pile cash into havens such as Britain.

In the UK and Australian economies meanwhile, the global economic slowdown means data has been lacklustre.

In the UK, the Bank of England MPC voted 9-0 against hiking interest rates last month, stating that problems including the Eurozone crisis mean it needn't raise rates until 2012. Furthermore, this morning retail sales arrived beneath forecasts, climbing 0.2% against expectations of a 0.4% increase. However - though it isn't a bed of roses in Britain at the moment - the nation is at least stable next to Europe, explaining the rise in sterling.

In the Australian economy meanwhile, in addition to concerns about the global outlook, economists are biting their nails that policies intended to nurture the mining boom such as high interest rates are strangling other sectors. Small businesses in particular have complained that the high rates are making imports too expensive, increasing costs and putting them under threat.

Perhaps for this reason, last month the Westpac leading index revealed that growth predictions for the next quarter are just 0.1%.