Quarter Pound

Quarter Pound

It was a good week for European equity markets with the FTSE100 finishing the week at 5636, its highest level for almost two months. Markets U.S. not have such a good time of it, with the Dow and S & P500 finishing largely flat in the week and the Nasdaq closing well after a sell Friday. There was better news for the greenback, though, as the pound fell to its lowest level for two years against the U.S. dollar. Although the dollar no doubt has been strong in the last month, spend the last week in Cable (USD / GBP) was largely a factor of weakening of the pound. It made a record weekly drop against the euro and fell to its lowest level since the spring against the Japanese yen.

With stream of bad news last week did not need to look far the reasons why the pound was taking a beating. Fears of recession increased after a CBI report showed the weakest high street activity in 25 years. Moreover, the housing numbers nationwide indicate that the current downturn in the UK housing was the worst for nearly two decades. However, there relatively good news for house builder Taylor Wimpey. Despite the dramatic headlines about your writing on the land value, Taylor Wimpey closed up in the week. The huge write in the value of its land bank was largely expected for once.

The FTSE enjoyed a good week, despite these data due to oil prices and improved sentiment in finance. These two sectors alone account for a large proportion of the benchmark index of the United Kingdom. Oil traders were on hurricane watch as Tropical Storm Gustav heading for Louisiana. WTI crude finished the week around $ 3.00 as accordingly. U.S. Monoline insurer MBIA indicated that it continues to win new business despite a reduced credit rating. Strong's numbers have helped MBIA to encourage financial sectors higher on both sides of the Atlantic, with Barclays and RBS both enjoying gains approaching 10% in the week.

Better than expected U.S. GDP numbers also sparked a mini concentration in the middle of last week. U.S. GDP numbers, was well above estimates with an annual rate of 3.3% increase. Addition, jobless claims came in lower than expected. While GDP figures associated with a growing economy U.S., also revealed a deeply divided one. On one hand, exports soar thanks to the weak dollar, second consumer spending; the lifeblood of the U.S. economy still searching desperately pulling once the effects of the stimulus package. The Bush bailout plan and the demolition of the Fed the dollar may have stopped the overall economy goes into recession, but there is one thing that pass nearby. Next quarter there will be no tax cuts for U.S. consumers and if oil continues to retreat, the dollar is likely to increase even more, so much damage to exports.

The S & P Case-Shiller home price index fell less than expected for the second quarter, but prices of homes in the U.S. are still down 15.9 years% year. On a more positive note, housing futures based on Case-Schiller index fund in late June and have been increasing since then. Expectations are for the lowest levels yet, but these levels are now thought to be better than projected earlier this year. However, it is too early to say with certainty that this heralds the beginning of the beginning of the much vaunted change in housing prices in the U.S.. Future interest rates are now implying that banks are increasingly reluctant to lend to one another, over fears that credit losses will increase as the feared global recession kicks in growth rates of the loans will not be godsend for homeowners on both sides of the Atlantic.

This week brings a lot of ads for higher economic level. Topping the bill on Thursday, are the Mediterranean countries and ECB interest rate announcements and accompanying statements. Both are widely expected to produce "any change 'verdicts, but as always, is the forward looking statements that cause the most excitement. Sterling traders are speculating on a rate cut of Mediterranean countries before the year ends. On Friday, the biggest announcement of the week is the U.S. The nonfarm payroll figures to ensure the week does not end in silence. Apart from that, this week brings data from the UK manufacturing on Monday and U.S. manufacturing Tuesday's data. On Wednesday we received from the United Kingdom PMI data. U.S. Markets are closed Monday for Labor Day.

Data for next week has the potential to or breaking the interim rally off lows of July. Analysis from Jason Goepfert of SentimenTrader showed that the ISE sentiment index reached extreme levels of optimism about a short term basis. Traders BetOnMarkets.com agrees that this index has been a reasonable contrarian indicator over the past years and a lot of potentially damaging data out next week, the risk is undoubtedly the low. A no touch trade on the S & P 500 and not the August highs of 1315 could return 62% over the next 16 days.

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Article Source: ArticlesBase.com - Pound Made Record Lows as Fear of Recession Increased