Forex: Final U. of Michigan Confidence Rose in February; USDJPY Mixed
THE TAKEAWAY: [US. February Final Michigan Confidence rose more than expected] > [US consumers continue gain confidence with saving cuts] > [USDJPY Bullish]
February final consumer confidence in the U.S. rose to the highest level in three months according to a report released by University of Michigan today. The Reuters/U of Michigan February preliminary index of U.S. consumer sentiment increased to 77.6 this month following an increase to 75.3 in January. The U. of Michigan Confidence Index is considered as one of the best leading indicators for future consumption. Economists in a survey polled by Bloomberg News had projected a final gauge of 76.3 in February.
In another report released today, consumer spending in US rose in January despite of income contraction. Employment gains and recovery in housing market have helped Americans to regain confidence on spending. With a higher pay-roll tax rate and increasing gasoline price, households preserve their spending by cutting saving in banks. As the overall economic outlook of US turns better, the consumer confidence is likely to continue in an upward trend.
USDJPY 1-minute Chart: March 1, 2013
Chart created using Market Scope – Prepared by Renee Mu
In the minute after the U of Michigan Confidence report was released, the U.S. dollar was climbed slightly against its Japanese peer. At the time of this report writen, the USD/JPY was trading higher at 93.11 yen.
--- Written by Renee Mu DailyFX Research
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.