So what are we goona do?

Party leader Nick Clegg revealed yesterday that the Liberal Democrats would focus on the "Rich" when they next win power. In a Radio 4 interview he targeted the Tottenham Hotspur chairman, Lord Sugar. Specifically, he wanted to withdraw "Alan Sugar's bus pass". That will be the pass he uses when his chauffeur drops him off at the bus stop then.

Of equal irrelevance was Tuesday's story that the European Stability Mechanism would invest some of its core assets (when it eventually gets them) (and pending their distribution to Greece, Portugal at al) in government bonds rated AA or better. Investors leapt to the conclusion that this would include Spanish government bonds and they hurried to buy the euro. The event proved two things: 1) most people don't look beyond the headline (Spain's rating is BBB, six grades below AA) and 2) even after three years of successive disappointments, investors are still eager to clutch at any hint of a rescue for the euro.

Irrelevant or not, the story helped to take the euro more than half a cent higher against sterling during the remainder of the London session and it strengthened by almost that much against the US dollar. The euro has not fared so well overnight though; the general strike in Greece and the riots in Spain did not help its case.  It starts this morning in London a cent below yesterday's opening level against the dollar and only a dozen ticks better against sterling. 

Most of Tuesday's economic data came and went without making any difference to FX prices. One certainly did make a difference; the Canadian dollar strengthened by nearly half a cent after the announcement of a punchy 0.7% monthly rise for retail sales. An unexpectedly strong 70.3 reading for US consumer confidence, seven points better than forecast, must also have helped the US dollar, although its impact was not immediately evident.

Today's figures are likely to be just as ineffectual as yesterday's. Euroland's contributions go no further than Italian retail sales and German inflation. The CBI distributive trades survey (retail sales) will affect sterling only if investors are desperate for an excuse to do something. US new home sales would have to be way out of line to move the dollar.

With nothing more than that to go on it could be another one of those days characterised by the two vultures in Jungle Book. "So what are we gonna do?" "I don't know."