Article / 30 August 2016 at 22:23 GMT

US Market Wrap: Confident consumers lift US dollar

FX Consultant / IFXA Ltd


  • Japan: Industrial Production  2305 GMT

US data released

  • Consumer Confidence August (Actual 101.1 vs. forecast 97.0) 
  • Case-Shiller Home Price Index June (Actual 5.1% vs forecast 5.2%, y/y) 
  • API Weekly Crude Stocks change (Actual 942,000 m/b vs. previous 4.464 m/b)
New York traders followed the lead of Europe and bought dollars to start the day. EURUSD opened at 1.1180, USDJPY was at 102.30 and GBPUSD was at 1.3080. That was a sign of things to come. The dollar buying became rather frantic following the release of the Conference Board’s Consumer Confidence Index. The index was at its highest level (101.1) in almost a year.  

EURUSD dropped to 1.1133 and USDJPY soared to 103.13 before drifting slightly lower into the close. GBPUSD rallied but those gains were erased by the end of the day.

The rally in the US dollar took the shine off gold and snapped an intraday rally in oil. WTI had climbed to $47.46 from an opening level of $46.93 but plunged to $46.19 immediately following the Consumer Confidence release. Adding to oil's woes was the end-of-day news that the weekly API report showed a build of 942,000 barrels.

US equity traders were not all that worried about the US dollar’s rise or the consumer confidence data. The three major indices closed in the red but essentially just gave up yesterday’s gains. In Canada, Agrium (AGU: TSE) and Potash Corporation of Saskatchewan (POT: TSE) confirmed merger talks to create a $30-billion-dollar company.

 The rally in the US dollar took the shine off gold. Photo: iStock


Are you wondering what's up with the world's central banks? Saxo Bank's Chief Economist, Steen Jakobsen may have some answers in this video: What is going on with central banks?: Jakobsen

Michael O'Neill is an FX consultant at IFXA Ltd. Follow Mike or post your comment below to
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Missed a day? Here’s what we had to say during our Asian session and our regular European Morning Markets, From the Floor and Mid-session Europe.


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