Market awaits Ben Bernanke speech at Jackson Hole
25/Aug/2011 • Currency Updates•
A quiet day for economic data for the UK on Wednesday say sterling fall against really a basket of currencies.
Confidence among British consumers declined further in July, as they turned more downbeat about the outlook for the economy, reports said Thursday morning, citing latest survey results from the Nationwide Building Society. The headline consumer confidence index fell to a three-month low of 49 in July from 51 in June, well below its long term average of 79.
Dollar gained over 0.8% against sterling and held firm against the Euro as concern’s over the Eurozone crisis. This contributed towards Gold falling by $104 its biggest one day loss since March 2008 on speculation that the global markets are stabilising. The talk of Ben Bernanke carrying out a third round of quantative easing are fading, instead he is now expected to show willingness to try more moderate steps to bolster growth like reinvesting current bond holdings into longer-term securities. Doing that could help push down mortgage rates and long-term corporate borrowing.
New orders for U.S. manufactured durable goods increased significantly in July, erasing a drop in orders in June that was less severe than initially reported, according to figures released Wednesday by the Commerce Department.
The report showed that durable goods orders came in at $201.5 billion, an increase of $7.7 billion or 4 percent from the previous month. Most economists had predicted a more modest 2 percent increase.
The German IFO business climate report disappointed, coming in at 108.7, lower than the previous month’s figure of 112.9 and lower than the forecasted 111.2 figure. The report showed that German business owners are not that optimistic about the economy. With the ZEW also posting poor results the outlook currently looks bleak for the Euro Zone, especially as Germany has been propping up the Euro for some time now.
Keeping with Germany, German chancellor Angela Merkel stated that there would be no quick fix for the Euro Zone and once again rejected the idea of Euro Bonds.
In other news France downgraded its growth forecast for 2011 and 2012 and Nicolas Sarkozy announced an 11 billion Euro austerity package. The announcement coming on the back of recent worries about France’s AAA credit rating.
Today, we have GFK consumer climate index figures out at 6:00am, the reading is expected to come in at 5.2, just down from 5.4 last month. However with a stream of poor results this week the GFK could disappoint.