The first significant figure was released – and it was too good to be true. CB Consumer Confidence was excellent – but the dollar lost it’s early gains. After the North Korean risk aversion reaction – risk appetite is back in the game.
Consumer Confidence, supplied by the Conference Board, was much better than expected. It went above 50 points, to 54.9. Such confidence, such optimism, hasn’t been seen since September 2008, before Lehman Brotehrs went under.
Early expectations were for a small rise – from 29.2 to 42.7. By the way, also last month’s figure was revised upwards.
American consumers are much more optimistic towards the future. It might be Obama’s stimulus package that’s kicking in, or some other spring joy. The American economy has stabilized, and Americans are lifting their head from the ground.
Consumer Confidence & Forex Trading
The US dollar made serious gains before this release. The North Korean bomb is one of the main reasons. After the nuclear explosion, North Korea played with two missiles, scaring the world even more.
The bomb helped stabilize the dollar, and the missiles took it higher.
During the morning, EUR/USD went under 1.39, GBP/USD went under 1.58, and USD/CHF went over 1.09. The greenback made gains also against other currencies.
All this was reversed when Consumer Confidence was released. Forex levels returned to the narrow channels before this morning’s dollar rally.
GBP/USD even pushed higher, peaking at 1.5969 before calming down.Tomorrow, there are some serious housing figures are awaiting the Pound. Read more about this here: Pound at New Ground – What’s Next?
Tomorrow’s main event is Existing Home Sales. Will it also make a big surprise? American housing is off the bottom, but still in a grim situation.
For more on the US dollar’s week, check out: Contraction or Retraction?