Wednesday, October 20, 2021

Dollar Down as U.S. Consumer Confidence Falls, Trims Fed Taper Bets

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imageForex3 hours ago (Aug 15, 2021 10:54PM ET)

(C) Reuters.

By Gina Lee – The dollar was down on Monday morning in Asia, remaining near a one-week low. The U.S. currency slumped the most in almost seven weeks on Friday, after a sharp fall in U.S. consumer confidence lessened the likelihood of a tighter U.S. Federal Reserve monetary policy.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.02% to 92.498 by 10:45 PM ET (2:45 AM GMT).

The USD/JPY pair edged down 0.19% to 109.36.

The AUD/USD pair was down 0.22% to 0.7352, with the Reserve Bank of Australia due to release the minutes from its latest meeting on Tuesday. The NZD/USD pair inched down 0.02% to 0.7036, with the Reserve Bank of New Zealand due to hand down its policy decision on Wednesday.

The USD/CNY pair inched up 0.01% to 6.4773. China’s industrial production rose a lower-than-expected 6.4% year-on-year in July, while retail sales also disappointed, growing 8.5% year-on-year in the same month.

The GBP/USD pair inched up 0.02% to 1.3866.

Investors digested U.S. economic data from the previous week that said consumer sentiment dropped to its lowest levels since 2011. The Michigan consumer expectations for August was 65.2, while the Michigan consumer sentiment was 70.2.

“Does the survey signal an imminent turn in the U.S. economy? We doubt it given vaccine efficacy remains high and the hit to sentiment likely means more people will get vaccinated… instead, the Delta surge in the U.S. is more a case of delay rather than derail as far as the recovery is concerned,” National Australia Bank (OTC:NABZY) analyst Tapas Strickland said in a note.

Further U.S. data, including core retail sales and retail sales, will be released on Tuesday.

Investors also await the Fed’s next move on asset tapering and interest rate hikes. Fed Chairman Jerome Powell will speak at a virtual town hall meeting with educators and students on Tuesday, with the minutes of its last policy meeting to be released a day later. Later in the month, the central bank will also hold its annual conference in Jackson Hole, Wyoming.

Dollar Down as U.S. Consumer Confidence Falls, Trims Fed Taper Bets

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