The euro rose further against the dollar this morning after figures from Wal-Mart raised concern over the strength of consumer spending in the US. Consumer activity accounts for around two thirds of the US economy and Wal-Mart, the world's largest retailer, last night missed quarterly estimates for the first time in seven years and tempered its outlook for the Christmas season. This morning, the euro rose 0.50pc to a near three-week high of USD1.1788. Further evidence on the strength of consumer activity - and the economy in general - will be provided today with the publication of October retail sales and the Michigan consumer sentiment index.
"These would have to be stronger than market expectations, and point towards significant growth in the economy at the beginning of Q4, if positive dollar sentiment is to be re-ignited," said Jenny Pollock, senior economist at AIB Global Treasury. Meanwhile, gold continues to hover around the USD400m amid increased global tension following the attack on an Italian police station in Iraq earlier this week. At 0830, gold was up USD1.45 to USD396.10 per ounce; it has not broken through the USD400 level since March 1996. //www.fxcentre.com