Sterling hits 15-month low against the Euro

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The Euro got it's second boost in as many days yesterday following the second austerity vote in the Greek parliament which was met with and a collective seal of approval across the foreign currency markets.

With Greece set for a whole range of cost-cutting, revenue-raising and asset-stripping measures investors got firmly behind the Euro, pushing it to a 15-month high above 90p (or a 15-month low towards £/€ 1.11 in Sterling v Euro terms) against Sterling. Compared to yesterday morning, the Euro is up half a cent up against the US Dollar and Sterling and up a cent and a half against the Swiss Franc; all the moves coming in the hour following the Athens vote.

European Central Bank president Jean-Claude Trichet also gave the Euro some traction, reminding everyone that the ECB was in a mode of "extreme vigilance" on inflation, more-or-less confirming Eurozone interest rate will go up from 1.25% to 1.50% which will probably see a sell-off in the Euro when it happens.

Sterling had another depressing time against the Euro, US Dollar and Canadian Dollar but it didn't fare so badly elsewhere ending the day marginally higher against the Japanese Yen, New Zealand Dollar and Australian Dollar from where it started. Overall it wasn't too bad considering Barclays forecast that interest rates won't go up until May 2012.

As is becoming the norm of late, economic data is being overlooked. Yesterday's data that was ignored was a notably lower-than-expected 2.7% Eurozone inflation rate and a four-and-a-half point rise in the Chicago purchasing managers' index from 56.6 to 61.1. Overnight Japan reported unemployment had fallen from 4.7% to 4.5% while Australian new home sales were down by -0.2% in May, reversing April's increase. 

Today's data calendar features manufacturing sector PMI's from the Eurozone, the UK and the United States; also from the US is the University of Michigan consumer confidence index for June and the US reports on May's construction spending. It is also Canadian Day holiday in Canada and independence day on Monday in the US.