Euroland wobbles

Prestige to the pound
High-definition photos of Pluto have been beamed back to Earth from the New Horizons spacecraft. The tabloids have already found a pyramid, the face of Boris Johnson and the word "OXI" within the images. Meanwhile, Europe stumbles onwards with a deal for Greece that everyone seems to hate equally.

Overnight the parliament in Athens approved the tax and pension changes that are a precondition of bailout negotiations. Germany and Finland must now legislate to pave the way for a new bailout for Greece. It isn't a done deal yet though: The situation was complicated this morning by the German finance minister, who hinted in a radio interview that Germany would oppose debt relief for Greece as long as the country remained within the euro.

There is a degree of relief that Greece's government has bitten the bullet but that has not rubbed off onto the euro, which lost three quarters of a US cent and three quarters of cent to sterling over the last 24 hours. The top performer, by a fifth of a cent, was the US dollar. Sterling was close behind, strengthening by an average of 0.8% against the other dozen most actively-traded currencies. The pound leads over the last week, month, three months and six months.

Contempt for the Kiwi
At the other end of the scale the NZ dollar was the weakest performer over the last day, week, month, three months and six months. Since mid-January it has fallen by 46 cents - 24% - against sterling. 

Six and a half of those cents disappeared in the last 24 hours. The Kiwi took three palpable hits, only the third of which - a lower-than expected first quarter inflation reading - was domestically-inspired. The first came when the US Federal Reserve chairperson told Congress that she still expects an interest rate increase this year. The second was when the Bank of Canada lowered its benchmark rate from 0.75% to 0.5%, reminding investors that the Reserve Bank of New Zealand might itself be contemplating another cut.

The Canadian dollar fell on news of the rate cut, falling two and three quarter cents on the day to a seven-year low. There were no other significant ecostats to exercise investors.

ECB and Greece
The European Central Bank governing council will meet today to consider renewing Emergency Liquidity Assistance for the Greek banks. Whatever it decides, Greece's capital controls are expected to remain in place for some time. 

There is every chance that the Greek banks will remain closed for the rest of the month. To reopen fully they will need a significant injection of cash and nobody knows where it will come from.

Whilst investors' resilience to the Greek situation has been well-documented there is a sense that their nonchalance is being challenged by the utter lack of coherence in the troika's handling of this latest crisis. It would be no surprise to see the pound moving higher against the euro.