F/X weekly comment

Two weeks on from my last blog on the single currency duel with sterling. Two weeks on, and precious little has changed, in fact the rate has moved by just 10 centimes, ending this week at 1.2050. A bit like my two weeks really, here I am in exactly the same place, but in the intervening period I found myself mixing with it the high-rollers in Monte Carlo. I didn't make my fortune though, and like sterling I'm back down at square one, if you can call it that (what would you call 1.05 then?). So what will change things from here?

The continuing story of Greece....

More like a soap really. How long can this drag on for? We were promised that a full resolution to the Greek debt problem would be in place by, let me see, which date shall we choose? Anyway, the latest promise is Monday. Dream on. Apparently there will be announcements on three issues. Firstly, the size of the haircut that private investors must take on their holdings (in addition to what hit the ECB will take). Secondly, the size of yet another bailout (MK111), which is going to have to be somewhere in the region of €130bn, and lastly another tranche of austerity measures announced by the Greek government for the Greek public to welcome with open arms.

A sideshow from Portugal...

Another fairly dismal round of bond refinancing during the week reminded the markets that Greece isn't where all the action is. In fact there is fun to be had wherever you look in southern Europe, if you like that sort of thing.

Can the UK and sterling capitalise on all of this?

Do bears defecate in Milton Keynes? Is the pope a Mormon? No, of course not. The latest apology for sterling is of course that we need the EU debt problem resolved quickly and positively in order to reassure the markets that the UK economy will not suffer. Lord preserve us from procrastinating apologists disguised as economists. Are we to believe that sterling is now inextricably tied in to a range between 1.0500 and 1.2050 against the lumbering school bully that is the Euro?

What now?

Maybe I should go and lie down for a while. Maybe then I'll wake up and the world will have come to its senses. Newt Gingrich will be US President, Greece will be the only currency left in the Euro, and there will be DM4 to the pound (and FF13). Gazole will be 20 cents a litre, but no-one will use it as cars run on air..

And why is this room all padded?

Still 1.200s next week folks.