Currency watch: Greece gains time

So the euro has survived the Greek austerity votes so far and pushes onwards.

The result was never in doubt really and the Greek ruling party managed to secure enough votes for both the austerity measures and their plans to implement them.

Outside parliament the situation was not so easy as riot police and protestors met head-to-head in Syntagma Square.

Most Greeks questioned after the announcement that the vote had passed were laissez-faire in their assessment, arguing that the government would have significant difficulty in implementing such measures.

So where does this all leave Greece? Still deep in the woods unfortunately, however they will have bought a little bit of time with these votes and they will be enough for the IMF/EU to disburse the next round of bailout payments.

We expect the focus will now switch to the rest of the Eurozone, with similar problems likely seen in the rest of the periphery and voter dismay in the core such as Germany.

Indeed there was a report yesterday that Germany had begun to print the D-Mark again in order to get ready for an exit of the single currency. Such rumours normally start flying around at times of crisis and I would not pay too much attention to them.

This comes a couple of days before German banks are expected to follow their Spanish and French counterparts in a agreeing a rollover of the Greek debt they hold.

Sterling has remained weak this week after a poor consumer confidence figure. This was not a surprise. The official blurb that came with the release was that a fall-off was expected after the bubble caused by the Royal Wedding and the slew of bank holidays we had in April considering the large headwinds the average British consumer will face through the summer months.

Jeremy Cook, chief economist at World First foreign exchange, 01.07.2011