F/X weekly comment

Not a vast amount to report this week in terms of currency movement. We've ended up a centime down on the week at 1.1950. To me this feels a bit like a lull before a big storm. Interest rates in both the UK and Euroland were kept on hold again, but the BoE came in with a new slug of QE, more on that below. The big story though, not for the first time this year:

Greece is still the word...

Caught between a rock and a hard place, it's difficult not to feel some degree of sympathy for the Greeks this week. No? OK, it is difficult. They desperately need more EU money, but first they've got to prove that they will make at least some attempt to pay (a bit) of it back, and they're struggling. They thought they'd come up with a decent new austerity package this week, but those stern nasty Germans weren't impressed, and they were sent packing to drum up some more riot-fodder. As I write this, on Friday evening (10th Feb), a headline has just burst onto my computer screen:

Marilisa Xenogiannakopoulou

I wouldn't bother even trying to annunciate it, and no it's not the Greek version of countdown, it is in fact the name of the fourth Greek government minister to resign today in protest over the debt negotiations. Yes, today. Giving a flavour of current sentiment, George Karatzaferis, a coalition party leader said, "Greece must not and cannot be outside the EU. But it can do without the German boot." Unfortunately the German boot is in fairly close proximity to the German hand that is shelling out most of the money.


Back in Blighty...

Some decent figures out this week, and an expected old friend reared his head in the form of another tranche of QE (Money printing to you and me). Now the theory goes that QE doesn't mean higher inflation, but personally I'll take more convincing than I've seen so far. Another £50bn chucked into the system this week would have hurt sterling even more, but the market was quite relieved that it wasn't the £75 bn that they'd been expecting.


More on Greece...

Update Sunday pm. The austerity cuts include under discussion now include:
• Another 15,000 public-sector job cuts
• liberalisation of labour laws (hire and fire)
• lowering the minimum wage by 20% from 751 euros a month to 600 euros
These were presented to a eurozone ministers in Brussels, but were rejected unless a further €325m in savings for this year are promised, and the Greek leaders give "strong political assurances" on the implementation of all of the packages. Unions are holding a 48-hour strike, and thousands of protesters are rallied in central Athens against the measures. Riot police are on standby. Watch this space.


What now?


Back to guesswork in the short term, so back into the 1.200s next week for me...