Forex News and Rumors – Afternoon Update

Shaky consumer spending keeps US economy in the mire

The downturn in America’s economy eased in the second quarter, official figures revealed today, supporting President Obama’s claim that the US has “stepped away from the precipice”. More

FDIC launches test of toxic assets sale program

The U.S. Federal Deposit Insurance Corp launched the first test of its Legacy Loans Program to help banks rid their balance sheets of toxic assets so they can raise new capital and increase lending, the agency said on Friday. More

US GDP contraction slows to 1%

The US economy continued to shrink in the second quarter making this recession the longest on record, but the more moderate decline lifted hopes that government stimulus measures could be loosening the grip of the downturn. More

US seeks to continue car rebates

The programme was backed by $1bn (£600m) of stimulus funds, but has proved so popular that more cash is needed to keep it going.
The House has approved an extra $2bn, and the Senate is expected to vote on the matter next week. More

Economy Shrinks Modestly, But Consumption Falls

The U.S. economy contracted at a slower-than-expected pace in the second quarter, government data showed on Friday, but a sharp drop in consumer spending fanned fears that recovery would be sluggish.

Gross domestic product, which measures total goods and services output within U.S. borders, fell at a 1.0 percent annual rate, the Commerce Department said, after tumbling 6.4 percent in the January-March quarter, the biggest decline since a matching fall in the first quarter of 1982. More

UK savers get £21bn compensation

In its latest annual report, the Financial Services Compensation Scheme said it paid out £21bn in the six months after the onset of the crisis.
That compares with just £1bn in the seven years before the crisis.
The scheme reimburses up to £50,000 per saver if a bank goes under, paid for by the UK financial services industry. More

U.S. Economy Probably Shrank at Slower Pace in Second Quarter
Gross domestic product contracted at a 1.5 percent annual rate from April to June after dropping 5.5 percent the prior quarter, according to the median forecast of 78 economists surveyed by Bloomberg News. The report will also include benchmark revisions for prior quarters. More

Dollar drops broadly

The dollar fell across the board Friday, pressured by month-end flows and after data showed business activity in the U.S. Midwest in July improved more than expected. More

Bank of America Plans Chinese Subsidiary

Bank of America plans to set up a wholly owned subsidiary in China to expand in the world’s fastest-growing major economy, people briefed on the plan said. More

Buffett reaps $1 billion profit on Chinese carmaker

Warren Buffett’s Berkshire Hathaway Inc has realized a $1.02 billion paper profit on a 10-month-old investment in BYD Co after shares in the Chinese car and battery maker quintupled. More

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