The Cheque’s in the Mail
I remember when I was a young man, I used to attempt to curry favour with my parents when I knew I was in trouble by tidying my room or completing some other chore I knew they would like me to do…before they found out about ‘the other thing’. Could it be that Greece’s early payments are a similar strategy? To build some goodwill by making early payments, before ‘Mum and Dad’ realise that there is no more money in the coffers? I think the way the EUR has been trading, that could well be the case, even if it’s not the next one but the one after that.
The instalment of money due to the International Monetary Fund was paid slightly early and that early payment has had very little impact on the GBP/EUR. In fact, the Pound has continued to press on the Euro and this will largely be because of the impending ‘liquidity crisis’. Yaris Varoufakis, Greece’s Finance Minister, says that the country’s financial situation is ‘terribly urgent’ and the situation may reach a crescendo in a matter of weeks.
Yesterday, the Bank of England made no change to the Interest Rate for the UK or the Asset Purchase Programme as was expected, so Carney will be due to expand on these decisions in the next two weeks. During the course of the day the GBP really pressed it’s strength on the USD after opening erratically and is now trading very strongly against both the EUR and the USD, so a fantastic opportunity to buy.
Today on the wires, we have UK Industrial and also Manufacturing Production figures. Then we have an important UK think tank’s UK GDP forecast and a range of USD data, but nothing critical from them. As it is now, it is a fantastic return to strength for the GBP. Who knows how long this might last.