Markets, Greenback rebound after Black Monday

US stocks and the dollar have tracked back gains after a sharp dip on Black Monday (24 August) across global markets. Global market volatility has caused central bankers in the UK and the US to reconsider their options for an interest rate rise because of concerns over global growth (or the lack of it).
 
However, strong gross domestic product data released overnight from the US – at 3.7% – has boosted the Greenback against its major counterparts. Stronger than expected unemployment reports, showing that unemployment has declined to a three-month low, also provided certainty for the US dollar as markets are of the view that the US economy could withstand pressure from an interest rate rise.
 
Inflation, however, continues to remain subdued and markets will focus on the Jackson Hole convention for more information on the Federal Reserve’s stance on monetary and economic policy, though it may turn out to be a damp squib as Fed Chair Janet Yellen has confirmed her absence from the meeting.
 
Data out on the economic calendar from the US today comprises of personal spending and the goods trade balance, while figures out from Europe are Italian consumer confidence and Spanish CPI data.
 
Pound takes a knock
 
Sterling lost considerable ground against the US dollar and currently trades at 1.5410 as stronger US data was priced into the markets. However, consumer confidence figures are at a 15-year high according to a survey published this morning by GfK, as low inflation and a slight pickup in wages has helped the cause.
 
Provisional GDP numbers are due for release later this morning and so is the Index of Services, which could provide further direction for the pound. It will still be this weekend’s Jackson Hole summit that will be the main focus for broader direction.
 
Have an excellent weekend (and if you’re in the UK enjoy the bank holiday on Monday).