News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • The Nasdaq 100 gains modestly after Monday's sharp losses, but sentiment remains cautious ahead of the FOMC rate decision. Get your market update from @Tams707 here:https://t.co/HLDN2JGfAf https://t.co/mRhlLUBGq6
  • Ethereum continues its sharp slide, currently down more than 4.7% on the day $ETHUSD #Ethereum https://t.co/BoTAiljU0y
  • Rising energy prices weigh on European policymakers as consumers fear higher prices, carbon dioxide shortages (CO2), and cold winter. Get your market update from @Tams707 here:https://t.co/HLDN2JGfAf https://t.co/tWhlMrXN4G
  • US President Biden: - Will discuss a trade deal with UK PM Boris Johnson - I do not want to see a closure of Irish borders
  • AUD/USD continues to trend lower ahead of tomorrow's FOMC meeting. Further $USD strength could bring the August low into play $AUDUSD https://t.co/X3zfpYN8Qe
  • Nasdaq Ekes Out Small Gain As Focus Turns to FOMC, Uber Flies On Bullish Guidance $NDX $UBER #trading #FED https://t.co/1uL1Ao3o3v
  • Fedex Q1 Results: Revenues: $22.0B vs. $21.8B est. EPS $4.37 vs. $4.92 est. $FDX down roughly 2.25% AH
  • In this week's Macro Setup @CVecchioFX, discusses with @RiskReversal and @GuyAdami, news regarding property developer Evergrande weighing down US financial markets, and September's Fed meeting impact on assets. Tune into the markets now!https://t.co/dBgjbpXLXL https://t.co/WXLoq1O1PL
  • Copper demand continues to outstrip supply, according to the recent update from the International Copper Study Group. Get your $XAG market update from @CVecchioFX here:https://t.co/23ii112k1E https://t.co/xHZfC2sffQ
  • China to be carbon-neutral by 2060; country will stop building coal-powered projects abroad - BBG
US Dollar Pullback Accelerates as Consumer Sentiment Plunges

US Dollar Pullback Accelerates as Consumer Sentiment Plunges

Rich Dvorak, Analyst

US DOLLAR OUTLOOK: DETERIORATING SENTIMENT MIGHT KEEP FED AT BAY

  • USD price action hammered across the board of major currency pairs this morning
  • US Dollar selling pressure is accelerating in response to dismal consumer sentiment
  • The DXY Index is down over -0.3% on the session as EUR/USD climbs, USD/JPY sinks
Advertisement

The US Dollar is seeing some movement Friday morning. USD price action has been trading on its back foot for most of the session, but weakness is accelerating as markets digest a big miss on the latest consumer sentiment report just released. Preliminary consumer sentiment data for August showed a sharp decline in the headline index as well as the current conditions and future expectations subcomponents.

Headline consumer sentiment was reported at 70.2, which compares to the market forecast and prior reading of 81.2. Current conditions nosedived from 84.5 to 77.9 while future expectations plunged from 79.0 to 65.2 according to the survey of consumers. The sentiment report noted that the “stunning” loss of confidence, primarily driven by mounting fears over the covid delta variant, was the seventh largest month-over-month drop in the headline index.

DXY – US DOLLAR INDEX PRICE CHART: 15-MINUTE TIME FRAME (13 AUGUST 2021 INTRADAY)

DXY Index Price Chart US Dollar Outlook

Chart by @RichDvorakFX created using TradingView

To complicate things further for the Fed, the consumer sentiment report showed 5-10 year inflation expectations rising to 3.0% from 2.8% reported in July. The consumer sentiment report also highlighted how “consumers’ reaction to delta’s modestly higher precautionary measures indicates the difficulty of producing optimal policy responses.” In terms of market impact, this likely further complicates things for the Federal Reserve and the debate around tapering asset purchases. That unsurprisingly has corresponded with more US Dollar weakness given the greater likelihood that FOMC officials drag their feet to delay the taper timeline.

-- Written by Rich Dvorak, Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES