GFK Consumer Confidence printed at 6.0 versus 5.8 eyed rising to its best level in nearly four years as income expectations rose to 42.9 from 37.7. The sharp increase in consumer sentiment has been driven by strong rebound in labor demand and bodes well for growth in H1 of 2011. Consumer spending has been a major laggard for the German economy but today's improvement in sentiment signals that growth may become more balanced towards consumption rather than being driven exclusively by production.
The EUR/USD however ignored the good economic news as market attention centred squarely on Tripoli where reports of further civilian bloodshed pushed sentiment to fresh lows as investors grow increasingly concerned that Libya may be on the verge of tipping into a civil war. Oil prices have spiked to $93.50/bbl rising by more than $7 from Friday's close and the fear in the market is that the growing unrest in the Middle East could create a long period of turmoil in the region bringing the global economic recovery to sudden halt.
The EUR/USD broke the 1.3550 level having fallen more than 150 points since Friday's close and is now under threat to slip below the psychologically key 1.3500 figure is risk aversion flows accelerate as the day progresses. @import url(/css/cuteeditor.css);
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