US politicians drag feet in resolving fiscal cliff issues as Germany set to vote on Greek bailout

Tom Tong30/Nov/2012Currency Updates

GBP

Good news for the UK and sterling as UK consumer became more optimistic about the economy and their finances as consumer confidence unexpectedly increased to an 18 month high in November.

The GfK data came in as -22 which was lower than the previous reading of -30. This jump was seen as a surprise because it contrasts with the Bank of England’s downbeat assessment of the economy earlier this month, however this optimism from the public may due to the appointment of a new Bank of England governor which was announce earlier this week.

On a less positive note data out yesterday included the UK’s nationwide house price index which came in at 0.0%. This was seen as disappointing from the 0.2% growth that was expected.

EUR

Good data from Germany yesterday helped the Euro to strengthen as unemployment figures came in that a net of 5000 workers, not 16000, were unemployed in November. This data indicated that the region’s economic driver wasn’t slowing down as fast as investors feared. As for other parts of Europe things were also looking positive, Italy successfully auctioned its 5 and 10 year bonds and got the lowest yields in two years.

Meanwhile Spain’s bond yields dropped to 5.25%, its lowest since April. Today we will see more data from the Euro region, starting with the German retail sale numbers out shortly, followed by France’s consumer spending data.

Italy’s employment numbers are also being released this morning and finally the euro zones CPI and unemployment numbers will be printed.

USD

Data released yesterday showed a positive revision for Economic growth in the US. Growth in the third quarter was confirmed at 2.7% which was up from the 2% originally estimated. Octobers pending home sales report came in much higher than expected at 5.2% versus the 0.9% forecast.

Employment insurance claims fell by 46,541 which drove a seasonally adjusted drop of 23,000 bringing it from 416,000 in the week ending 17 November to 393,000.

Concerns mount over the handling of the fiscal cliff with house speaker Boehner remarking that politicians are no closer to resolving the issue.

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Written by Tom Tong

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