Forex News: U. of Michigan Confidence Back at 2007 Highs, USDJPY Rallies
Another day, another strong print for the US economy. This time, one of the best leading indicators for future consumption, the U. of Michigan Confidence report, surged to its highest level in five years, beating all 71 economists polled for a Bloomberg News survey. The preliminary November reading came in at 84.9, well-above the forecasted 82.9 and the final October figure of 82.6.
Additionally, the Economic Conditions subcomponent is up to 91.3, a yearly high, and the Economic Outlook is in similar rarefied atmosphere at 80.8. Needless to say, the US consumer is feeling good. Why does this matter? Consumer confidence often leads spending habits; with consumption representing nearly 75% of the headline GDP, this private sector reading of sentiment can be very market moving.
USDJPY 1-minute Chart: November 9, 2012
Charts Created using Marketscope – Prepared by Christopher Vecchio
Following the release, the USDJPY initially dipped from 79.32 to 79.28, but the improved US data eventually kicked in and boosted the pair higher. At the time of writing, the USDJPY had appreciated to 79.48, while the AUDJPY had appreciated to 82.55 from 82.37.
--- Written by Christopher Vecchio, Currency Analyst
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