#GBP at multi-year highs against #EUR #AUD #NZD #CAD #ZAR. Time to buy? Yes!!

The International Monetary Fund, one of the architects of the latest bailout deal, has cast doubt on the deal it put together by saying Greece will need “debt relief on a scale that would need to go well beyond what has been under consideration to date”.

So, hang on a minute, is the deal agreed on Monday morning another example of kicking the can down the road? Another Eurofudge designed to paper over the cracks sufficiently to hide the problem for long enough to make it someone else’s problem in the future? It would seem investors had seen this coming although they didn’t deal out any fresh punishment to the Euro on Tuesday as it was pretty steady against the US Dollar.

Sterling’s strong performance yesterday was due to the Bank of England governor’s commenting to the Treasury Committee that “the point at which interest rates may begin to rise is moving closer”. One could argue he was stating the obvious but investors became very excited and supported Sterling, jumping an immediate cent higher against the Euro and the US Dollar and continued to drift up during the rest of the day.

Mr Carney’s observation came little more than hour after the Office for National Statistics revealed that UK inflation in the year to June was 0.0%. The figure was exactly in line with forecasts and made no difference to Sterling. US retail sales was a different story in June falling by -0.3% instead of rising by 0.3% as forecast.

This morning’s highlight will be the UK employment data, which should show a further acceleration in wage increases. After lunch the Federal Reserve chairperson will give her biannual testimony to Congress and the Bank of Canada will announce its monetary policy decision. Tonight we have New Zealand inflation figures for the second quarter.

As for Sterling, anyone with foreign currency to buy should consider getting some of it done today. The pound is close to multi-year highs against the Australian Dollar, NZ Dollar, Canadian Dollar, the Euro and South African Rand.