US consumer confidence and German business confidence get robust - where does euro go from here compared to dollar?
Sondra Mackenzee
Sep. 26, 2006

The German economy is showing best robustness and accelerating growth in the last fifteen years while US is pegged with real estate masket problem.

US consumer confidence and German business confidence get robust - where does euro go from here compared to dollar?

The lower gas prices have pushed US consumer confidence up. The consumer confidence index rose to 104.5, up from 100.2 in August. Analysts were expecting 103.

At the same time the business confidence index in Germany came higher than expected from Munich-based Ifo institute. The index actually fell slightly from 105 to 104.9 while the analysts were expecting much lower number.

The currency players are foxed at the two numbers. The real story however lies behind the scene. German and French econmies are showing signs of life and is accelerating fastest in fifteen years. At the same time, besides the slight blimp, the US economy is dtagnated at best and is facing daunting task of carrying forward the real estate bust.

German savings rate is much higher and the real estate market went through a solid correction for the last decade.

Add to that the trade deficit and balance of payment issues that haunts US Dollar. The good side of US Dollar is the resilient nature of the currency. As many top currency palyers and investors of name recognition have shoted dollar, the cuurency held steady making a boom for dollar index option sellers.

The test for US dollar is now. If it can hold steady it will go up. One thing is for certain - the biggest asset of any economy is its buying power and there no one can beat America.

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