President Barack Obama wins second term
US President Barack Obama has secured a second term at the White House defeating Republican challenger Mitt Romney. Markets reacted with the US dollar weakening on speculation his victory will boost chances that the US will continue with its monetary stimulus polices.
The rebound seen in the UK economy is rapidly losing momentum as the latest retail sales data slowed sharply in October as Britons limited to spending essentials such as food and drink, the British Retail Consortium said on Tuesday, dampening hopes that consumers will drive the economic recovery.
German industrial orders also failed to meet expectations in September falling 3.3% month-on-month. The main driver was a collapse in orders from the eurozone which contracted 9.6%. On the other hand, the French government unveiled a set of measures aimed at boosting the ailing industrial sector. The package includes 20 billion euros in tax breaks for businesses over three years, 10 billion euros in spending cuts and a 10 billion euro consumer tax hike. The standard sales tax will be raised from 19.6% to 20% from January 1, 2014. The reduced VAT will grow to 10% from the current 7% while the super-reduced VAT will slide to 5% from 5.5%.
On the FX market, GBP/USD settled the session essentially flat, as market focus remained firmly on the latest Presidential elections in the US, with markets “hoping” that the next administration will take on a more proactive approach on healing the damaged economy. Although the pair was not particularly reactive to the release of the latest Industrial and Manufacturing Production reports, underperformance was evident when looking at various crosses, especially against the EUR, which saw the cross break back above the 0.8000 level.
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