Today, as the day before, is truly calm for the United States as no crucial economic data is being reported, glumness is still spreading throughout the country since last week when the jobless rate for October was reported; showing an unexpected depressing incline as it came in at 10.2%, the worst level of unemployment witnessed in 26 years, indicating that the world's largest economy requires a long path from seeing a full economical recovery.
For instance, the country's Federal currency strengthened slightly yesterday throughout the currencies market on pure correctional movements, as fears returned to markets after that the U.S stocks dropped within the midday session, permitting accordingly the green Benjamin to recover from Monday's 15-month low that it witnessed after that the G-20 was silent regarding the U.S currency current past movements in the market, leaving it fact to its own destiny.
Still, yesterday's slight strength of the green Benjamin is highly forecasted to be temporary, as it is a mirror of the overall current outlook of the U.S; mixed so far, on one hand the labor market, one of the major key sectors of the economy, is deteriorating furthermore, while other important sectors such as the manufacturing and housing sectors remain on showing increasing signs of expansion since both are recovering gradually from the crisis.
Accordingly, the green Benjamin lost momentum again today, having the dollar index, which tracks the strength of the Federal currency, plummeting on the daily chart to permit the yellow precious metal to record a high of $1117.26 an ounce since the appeal of the gold as an alternative investment is boosted; besides the fact that gold and the dollar have a strong inverse relation.
Moreover, the decline in the green currency spurred demand on commodities especially gold, which rose to a historic high of $1117 an ounce, knowing that the yellow precious metal inclined this year as a hedge against inflation since world economies spent near $2 trillion dollars to inject liquidity in markets and to revive their economies.
In addition, in the coming period; central banks are expected to unwind stimulus measures but they will raise interest rate inflation is expected to rise over the medium to long terms, and the outlook for inflation might help in sending gold prices to the $1.200 levels on the medium term, which is what analysts expect.
As for the U.S stocks, they have plunged throughout yesterday midday session due to gloomy earnings posted from MBIA Inc. and Fluor Corp, which disappointed investors but fluctuated by the closing session due to yesterday's dollar slight recovery after indices managed to reach the highest levels in more than a year at the start of the trading session.
As an overall, we have to say that the 3.5% growth witnessed within the quarter was only supported by the billions of money injected throughout the economy and therefore this growth is only fictional, as the world's largest economy remains weak due to the current unstopped rising unemployment, weak income growth and ongoing tightened credit conditions.
