Pound Looking As Sick As A PIG

We might not be one of the PIIGS quite yet, but the pound is certainly behaving as if we are one of them, possibly worse off than one of them. They at least have the likes of France and Germany to help protect them when the Big Bad Wolf comes a calling. What do we have? One eyed Jock, the King of Smarm and all their non-dom peer purchasing buddies. Hardly inspires confidence does it?

Sterling fell to its lowest trade-weighted index since last March yesterday and still languishes below 1.50 against the dollar, fell to a 25 year low against the Ozzie dollar (after they raised interest rates to the dizzy heights of 4%), and is struggling to try and hold its head above 1.10 against the euro.

I feel quite sorry for David Cameron actually, what must it be like knowing that your are only marginally more popular than Gordon Frown for Christ's sake?

Yesterdays run on the pound deflected some of the attention away from Greece, at least for the time being. Whilst Germany and to a lesser degree France, might have a vested interest in coming to Greece's rescue, some reports suggest that Britain owns a fifth of Greek bonds.

If a German-led bailout fails to materialise, as German Chancellor Angela Merkel herself keeps insisting it will, then I guess that the IMF will become the new reluctant favourites to pick up the Greek hot potato.

We might know the answer to the first bit quite soon, the Greek PM is in Berlin on Friday.

What then for the pound? Whilst it's immediate fortunes against the euro, a similarly afflicted currency, are a difficult call (the single currency itself fell to a 10-month low against the dollar today), it should be noted that the Times are reporting today that we've fallen by more than 7% against the Zimbabwe Dollar since the end of January!

Certainly the potential that the next election could be a much closer run thing than the polls had been indicating, and the spectre of a hung parliament, points to further significant depreciation against the US dollar.