Friday, 21 September 2007

Economies hold up but not the US dollar

It's still early perhaps but the US economy appears to be holding up relatively well.

The Conference Board's index of leading economic indicators fell 0.6 percent in August but is up 0.5 percent over the past six months.

The employment picture appears to be rebounding from August, initial claims for unemployment benefits falling by 9,000 last week to a seven-week low of 311,000. This was accompanied by a fall in the four-week moving average by 3,500 to 320,750.

And manufacturing in the Philadelphia region improved in September, the Philly Fed index rising to 10.9, up from zero in August.

And it is a similar picture of resilience in the UK, with retail sales and mortgage lending rising strongly in August and firms surveyed by the Confederation of British Industry remaining confident about output growth prospects in September.

Meanwhile, confidence in Japan also seems to be recovering, the government reporting that its index of business confidence among large Japanese companies rebounded to 6.2 in the three months to September from minus 0.9 percent in the previous quarter.

Confidence in the US dollar, however, has dropped in the wake of the rate cut on Tuesday. FT reports:

The dollar slumped further on Thursday, oil hit a record high and gold reached a 27-year peak, while stock markets showed signs of strain just two days after the Federal Reserve’s surprise half-point rate cut waned...

On currency markets, the beleaguered dollar breached $1.40 against the euro to hit a record low, taking its losses to more than 1 per cent since the Fed’s move on Tuesday. It also fell to parity versus the Canadian dollar for the first time since 1976 and lost 1.5 per cent against the yen.

No comments:

Post a Comment