With Monday having been so bleak for the global markets following China’s devaluation of its currency and cutting of interest rates, then the handwringing that followed yesterday when the markets tried their best to rectify things, we did see something of a turnaround for the pound and dollar as the dust settled and calm was restored. GBP gained back losses against EUR at 1.1%, already there was a backtracking in strength against ZAR, AUD and NZD. The UK will be hoping for more improvement after Chinageddon – we’ll have to wait until Friday for domestic data releases, though, when we’ll see quarterly GDP estimates. Until then, direction will be given from happenings elsewhere.
In Europe, Germany showed positive business confidence results for August – bucking concern across the commonality over China and Greece and the impact they might have on the Eurozone. Momentum seems to be with the single currency and its prospects for the time being.
USD, too, was on the mend yesterday as china’s news subsided. Consumer confidence was seen to improve but much more than expected – coming in at 101.5, up from 93.4 the month before. Today’s data in the US includes durable goods orders, mortgage applications and a speech from Fed member Dudley.
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