US Dollar Sells Off After Disappointing May US Consumer Confidence
Declining sentiment about the labor market has damaged US consumer confidence, the Conference Board’s reading for May showed. The headline reading fell to 64.9 from a revised 68.7 in April, below the consensus forecast of 69.6, according to a Bloomberg News survey. Today’s reading also comes in below the three-month confidence average at 67.7.
Most notably, the “Present Situation” component decline to 45.9 in May from 51.2 in April, while “Expectations” dropped to 77.6 from 80.4, the subcomponent’s first sub-80 reading since January. Additionally, the “Labor Index Differential,” the subcomponent that subtracts “Jobs Hard to Get” from “Jobs Plentiful” declined to -33.1 from -29.7, suggesting that the labor market is starting to weaken again.
USDCAD 1-minute Chart: May 29, 2012
Charts Created using Marketscope – Prepared by Christopher Vecchio
Following the release, the US Dollar ticked higher against high beta currencies such as the Australian and New Zealand Dollars, but any gains were erased rather easily as the report was digested. While the Japanese Yen maintained its gains against the US Dollar, the AUDUSD and EURUSD quickly shot higher, with the former gaining approximately 30-pips and the latter gaining 12-pips. The Canadian Dollar was notably stronger, with the USDCAD falling from 1.0237 to 1.0213, at the time this report was written.
--- Written by Christopher Vecchio, Currency Analyst
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