Confusion in the currency markets
A surprise increase in jobless figures in America saw the dollar come under pressure on the foreign exchanges today as did the euro on the back of disappointing economic data regarding the euro zone. There is also concern that the Irish government will come under further pressure in the short to medium term with regards to the overall cost of bailing out the Irish financial sector.
The currency markets are very often a good pointer toward short-term economic performances and if this is the case then the euro zone and the US economies may well have a troubled fourth quarter of 2010. This comes at a time when the UK economy is rather strangely looking a little stronger than many others in Europe despite the negative comments which have been appearing in the UK press. It will be interesting to see how the European and the UK economies do perform over the next 12 months and indeed whether David Cameron's early attempt at introducing austerity measures will perhaps be the catalyst for a stronger UK economy in the medium to longer term.
There is so much confusion regarding worldwide economies that many investors are now looking to stay on the sidelines and let economies and asset prices stabilise.
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