Fuelling speculation

What has happened to the US economy? It can’t all be the ‘The Obama effect’, can it? Whatever you think of US foreign policy or their ability to ruin the world’s economies you have to admire their tenacity at fighting back from the gutter of financial disaster.

The USD has fought hard against other currencies recently, driving the pound and the Euro down as well as causing a ripple effect amongst home economists. There was a buoyant mood in America last week but it could have come crashing down had the employment data not been as bad as expected. The market readied itself for bad news and it got bad news but the effect on the market was minimal.

Spread betters may have used this information to their advantage on the currency exchange, holding positions perhaps or even speculating on further improvements in the USD status. What speculators may also have anticipated was that although the job losses in the Detroit car manufacturing industry were dire the fact that this meant manufacturers had to showcase their fuel efficient cars.

Many analysts saw this as having a positive effect on countries with large automotive industries because electrical cars mean a transformation in car manufacturing and thus upbeat speculation that alternative energies are around the corner. Car manufacturers will have to employ people to build the new cars and perhaps stimulate a new market. These kinds of projections helped propel the American stock market a small amount over recent weeks.