The US dollar ended the day down against its major counterparts as the Conference Board's consumer confidence survey reflected its worst readings since record-keeping began in 1967. Indeed, the index plunged to 38.0 in December from 47.7, with a breakdown of the survey showing a gloomy picture of the US economy. Consumers judged that business conditions had worsened, and that employment had been either less plentiful or just plan hard to get. This data suggests that consumption will weaken further in coming months, and also that the January 9 employment reports are bound to be disappointing. Adding to this sentiment, the International Council of Shopping Centers (ICSC) said that sales fell 1.8 percent in the week ending December 27 from a year earlier while sales fell 1.5 percent from the week prior. Furthermore, the group said that they expect November and December sales to fall from the first time since ICSC began tracking holiday sales in 1969 at a rate of -1.5 percent to -2 percent. Nevertheless, the direct impact of this data on the US dollar has generally been limited as the Federal Reserve has already brought interest rates to record lows, leaving the central bank with little room for maneuver.
Looking ahead through the end of the week, Wednesday’s initial and continuing jobless claims are likely to hold near their highest levels since late-1982, signaling that the unemployment rate is steadily climbing higher. On Friday, the Institute for Supply Management’s (ISM) index of manufacturing conditions during December may fall to the lowest levels since 1982, while the record low of 29.4 reached in May 1980 looming close below. The latter report is likely to have greater implications for the greenback, but only if liquidity picks up enough following Thursday’s market closures for the New Year’s holiday.
Related Article: US Dollar Weekly Trading Forecast
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