The news that Iran is actually test firing long range missiles hit badly the already weak US Dollar which came off across the board this morning. This has resulting in flattening out yesterdayâ€™s positive move for the US Dollar despite reassurance from Bernanke that the Fed will continue supporting the US banking sector going forward.
The Yen advanced against the dollar, as Nikkei was trading 50 basis points (0.5%) higher on the day and the core machinery orders jumped to over 10% against an estimated 1.1%.
Finally, the British Pound continues to suffer against the Euro, and given the current economic outlook of the British economy, this trend is likely to continue for most part of the next year. Bank of England is expected to keep rates on hold at tomorrowâ€™s meeting, but no specific plans or strategy has yet been announced to tackle the pressing issues of rising unemployment, rising food and oil prices, falling house prices, and all these in a highly inflationary economic environment.