Dropping UK confidence outlined in the latest GFK report had a notable impact on the markets today. The survey indicated that consumer confidence was at -29 opposed to the previous -21. This drop exceeded analysts’ expectations, surprising the markets. The vast nature of this drop is compounded by the fact that such a big monthly drop was last seen in 1994. The rare nature of this fall has embossed this figure onto the trading mindset. The consumer confidence data contrasts virulently against the upbeat US earning season.
Bullish market sentiment pushed forward US dollar supremacy with the Euro weakening in preparation for the fourth quarter US GDP reading. Analysts are anticipating a fourth quarter rise of 3.5%, more than enough growth to leave the US dollar in an economically stable position.
The Aussie dollar and Greenback pairings remain steady this morning. Speculators have been analyzing the broader impact of the Australian floods on the GDP, Treasurer Wayne Swan considers there to be a substantial possibility that the Australian GDP will drop by 0.5% in 2011. Real-time trading has not mirrored the physical damage done to Australia and despite being rocked by natural forces, the Aussie dollar continued to sustain parity within the forex markets.
The Yen sprinted back into the markets after yesterday’s taxation setback. The increase in the Yen is likely to anger Japanese officials who are trying to devalue the Yen’s exponential growth rate. Fumihiko Igarashi the vice minister of finance has emphasized that he will take, ‘decisive steps’ in the event of unnecessary movement regarding the Yen.
