Weak Euro and Pound Support Dollar
News in the Eurozone of economic weakness has pushed the Euro to a 6 month low against the Dollar.
Contracting German GDP and slumping consumer confidence confirms the spread of economic slowdown to the European region and has fuelled the return to form of the dollar.
The German IFO institute based in Munich, reported the business confidence index has slumped in August, to levels not seen since 1993. The recent drop in commodity prices was providing little relief to consumers leading Walther Otremba, Germany's deputy economy minister, to comment yesterday that the prospect of recession, through further economic contraction in the third quarter, could not be eliminated.
The European Central Bank meets next week and is expected to announce interest rates cuts.
The Sterling also remains in a slump, reaching a 2 year low against the Dollar with the Bank of England providing no immediate hopes of recovery.
British Bankers Association also reported mortgage approvals are down to an 11 year low this week.
The US Dollar is moving from strength to strength at the moment and remains the one to watch for currency exchange.
Despite US economic data remaining cautious of growth and inflation, a rise in consumer confidence is appearing, fuelling the Dollars buoyancy.