Pessimistic reports from the Eurozone and US have continued to hurt sentiment this week, prompting investors to flee to haven currencies including the US dollar and Swiss franc. This - combined with encouraging data from the Australia economy - means the GBPAUD exchange rate has dipped for the second straight week.
Looking at the Eurozone, Greece once again faces default according to statements from the State Budget Office, claiming that public debt has spiralled out of control in spite of recent spending cuts. This has reignited concerns about the implications of a default across the rest of Europe.
In the US meanwhile data has revealed that consumer confidence has hit a 17-month low, prompting rumours that the US could be heading into a double dip recession. So not great!
Looking at Britain the latest data has not been spectacular, though conditions are perhaps more stable than elsewhere on the globe.
The manufacturing sector experienced a second straight month in decline, dropping to 49.0 according to the latest data. This is the lowest figure in 26 months and calls into question the government's export-led growth plan. Furthermore net lending data also disappointed this month, expanding beneath forecasts to just 0.9bn. This tells us both that banks remain cautious about lending and consumers about borrowing.
On the other hand, in the latest growth estimate British GDP increased 0.2 ahead of both France and Germany, so this is encouraging.
Turning to Oz last but not least concerns about the impact of the mining boom on manufacturing continue to dominate, but there has also been good news.
For one business investment - called capital spending - increased 4.8 in 2011 compared to 2010. This tells us that businesses in Oz anticipate strong economic prospects in the coming months. In addition retail sales jumped too rising 0.5 this month, following 2 months in decline. This tells us that consumers could be more confident about the economic outlook too.
On the other hand reports from Oz manufacturing continue to cause huge concern. The manufacturing sector shrank to 43.3 according to the latest data, indicating a furious decline on the back of the strong Australian dollar. This has derived from the mining boom, and so points once more to a developing two speed economy in Australia.