USD/JPY Rallies, then Falls, as U. of Mich Confidence Misses Slightly
USDJPY 1-minute Chart: June 14, 2013
Charts Created using Marketscope – prepared by Christopher Vecchio
The USDJPY briefly dipped below ¥95.00 following the weaker than expected preliminary June U of Michigan Confidence report, which came in at 82.7 versus 84.5 expected. Although the US Dollar has come off a bit across the board, the report wasn’t as bad as the headline suggested. The Consumer Expectation subcomponent rose to 76.7 from 75.8 in May, the highest level in 2013 and the highest such level since November 2012 (77.6). In fact, this was the second strongest Consumer Expectation print since July 2007 (81.5), if only to underscore the renewed confidence among US consumers.
Accordingly, a sustained higher level of consumer confidence should help bolster consumption trends, and it is possible that the June Advance Retail Sales print eclipses yesterday’s report (+0.6% vs +0.4% exp, from +0.1% in May). At this point in time, this data falls in line with our belief regarding the state of the US economy and whether or not the Federal Reserve will taper QE3: the economy is doing good, not great; and as a result, a material shift in policy (>$15B reduction) is unlikely on Wednesday.
--- Written by Christopher Vecchio, Currency Analyst
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