Euro thrives on Greece optimism

Slower services
The biggest shock on Wednesday was seeing on TV that Captain Birdseye had turned state's evidence in the FIFA bribery affair. The second biggest was the news that companies in Britain's services sector reported less lively activity in May.

The second monthly round of purchasing managers' index readings showed the UK measure falling three points to 56.5. Although that was beaten only by Spain's 58.4 the disappointment was still enough to knock more than half a cent off the pound's value. 

In most cases sterling was later able to recover the lost ground, leaving it on average just about unchanged against the other dozen most actively-traded currencies. The pound was higher on the day against the Commonwealth dollars and the yen, steady against the Swiss franc and lower against the US dollar and the euro.

Buoyant euro
The euro could not keep up with the Swedish krona but it was the top performer among the major currencies, strengthening by a cent and half against sterling. It was helped by greater optimism about the Greek situation and, to an extent, by the European Central Bank.

Between the beginning and the end of his press conference the ECB president added half a cent to the value of the euro. He said the bank had raised this year's inflation forecast from 0% to 0.3, with the projections for 2016 and 2017 unchanged at 1.5% and 1.7% respectively. Sig Draghi dismissed the idea of an early end to the quantitative easing programme and refused to comment on the negotiations between Greece and the troika.

Plenty of commentary on the matter was to be heard elsewhere though and its tone was mostly positive. Athens has apparently found the €300 million it needs to cover tomorrow's repayment to the IMF and the troika has watered down its demands for Athens to run a budget surplus. Investors remain optimistic that one of the participants in this game of chicken will swerve, and they rather fancy it will be the EC unless the German finance minister manages to grab the wheel.

Countdown to Friday
With most of the PMIs out of the way there should be a lull today before tomorrow's potential storm of US payrolls and Greek debt repayments. There is zero chance that the Bank of England's Monetary Policy Committee will make any change to interest rates.

Australia opened the batting this morning with its figures for the balance of trade and retail sales. Retail sales were flat in April and the trade deficit widened as imports rose by 4% while exports were down by -6%. The Aussie lost a cent and a half on the news. US jobless claims and Canada's Ivey PMI come out after lunch.

Although there are no Euroland ecostats to speak of, the euro is still likely to be the focus of investors' attention. For it to have another winning day, investors will need to hear more good news about Greece.