With little economic data due out today it has given world markets time to dwell on what has been an appalling month for just about everyone. Consumers are taking a pesemistic view on what is likely to be a slow end to the year for most. Sterling will end the month as it began; going nowhere. The US Dollar, given the month it has had still holds relatively firm despite minor setbacks. Finally, the euro continues to defy all the odds as it over performs. All we are left to wonder is whether September will hold more of the same…
Pound Sterling – UK Markets
UK consumer sentiment fell for a third month in August as the ‘pessimism plague’ crossed our boarders. With the government already tied up with reducing the budget deficit over the next 6 years, this months riots did little to help people take a positive view on the future. A number of indicators have stated that this signals that the economy is either stagnating or returning to recession. The Pound however was little changed across the board and continues to bore the pants off the majority of us.
US Dollar – US Markets
Minutes from the August 9 meeting between members of the Federal Reserve indicated that despite Chairman Ben Bernanke fluffing over the vital aspects of the plan several individuals pushed heavily towards more substantial involvement. In short, various members felt that a more bullish attitude towards a rate rise should have been put forward. This is in contrast with the view that interest rates should be kept on hold for the next two years; talk about shooting yourself in the foot. The dollar lost ground earlier in the month in the immediate aftermath of the debt concerns. However, since then is has fluctuated within reasonably tight resistance levels as it struggles to claw back those losses.
Euro – European Markets
There have been no real surprises stemming out of the eurozone today as the German unemployment rate stayed firmly fixed at 7 percent. However, despite the continents biggest economy holding firm the EMU released data showing that unemployment rates had not improved in July after it was expected they would. The Euro has been in a tug-of-war with sterling this morning with rates bobbling in the late 1.12’s throughout the morning, as it struggles to break free of the tight margins it is working within.
Other Currencies – Highlights
The volatility of the currencies involved in commodities have once again been displayed as the Australian and New Zealand Dollars both head for monthly declines versus the US Dollar, as worries over the global economy grows.