US Consumer Confidence Data Set To Shape GBP USD Exchange Rate, Announcement Of ?1bn Business Bank Assists Pound Sterling

Published: Tuesday, 25 September 2012 09:00 BST - Written by John Cameron

STORY LINK US Consumer Confidence Data Set To Shape GBP USD Exchange Rate, Announcement Of ?1bn Business Bank Assists Pound Sterling

Asian stocks registered barely any movement during last night’s session, as institutional investors await this month’s US Consumer Confidence survey, due for release at 1500hrs BST. Recent US data releases have outstripped analysts’ expectations; the last notably weak American data set came in the form of August’s Non-Farm Payrolls number, released at the start of this month, which served to precipitate the Fed’s announcement of more QE for the US economy. Estimates are that this afternoon’s data will show a marked uptick in positivity amongst American economic participants, with this month’s figure expected to show at 63.2 versus last month’s print of 60.6. It remains to be seen whether the Fed’s announcement of more Quantitative Easing will have been enough to trigger such a pronounced bounce in the US population’s ‘feel good factor’. If the key release does register a strong showing, then expect commodities to move ahead again following their recent poor showing, favouring the commodity-driven Canadian, Australian and New Zealand Dollars. The safe-haven Greenback would also be likely to lost ground, sending the GBP USD exchange rate back above the 13-month high which it broke to on Friday.

Elsewhere, yesterday’s afternoon session saw the UK’s coalition government announce that it is set to invest £1bn into a bank specifically designed to make funds available to Britain’s struggling business sector. The Pound has recorded gains against nearly all of the other majors during the overnight session suggesting that investors approve of the plans, which aims to increase activity in Britain’s commercial enterprises, in the hope that individuals will benefit via a ‘trickledown’ effect. The efficacy of the scheme remains to be seen, as estimates are that the bank will take some 18 months to instigate. Still, ‘every little helps’.

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