Dollar Wobbles on Falling Consumer Confidence
The softest reading on consumer confidence since November heightened QE3 expectations ahead of Bernankes Jackson Hall speech. The euro was the top performer Tuesday while the New Zealand dollar lagged. The Republican convention and Q2 Australian construction work are the highlights of Asia-Pacific trading. Ashraf will issue a fresh edition of this week's Premium Insights on Wednesday.
US consumer confidence slumped to 60.6 in August on declining attitudes about the future economy. The consensus estimate was 66.0.
The euro and pound sterling made headway against the US dollar, erasing declines from earlier in the session. The euro tried several times to break 1.2580 but has stalled out each time. Cable fell early in the day but bounced beautifully from a cluster of support around the 100-day moving average and surged to 1.5835.
There were some positive signs on the US economy as well. The Case-Shiller house price index rose 0.5% compared to -0.1% expected. The Richmond Fed also edged ahead of expectations at -10 vs -9 expected.
Politicians attempted to jawbone oil lower with a co-ordinated G7 statement saying they stand ready to release strategic reserves. WTI was unimpressed and continued to move sideways at $96.20.
The market continues to build toward Jackson Hall on Friday even with Draghi cancelling his planned appearance due to a busy schedule.
The Republican convention will take over the US airwaves today as campaign rhetoric heats up. It is unlikely that anything market moving will come of it but risks remain. The lone item on the Asia-Pacific calendar is Q2 Australian construction work done at 0130 GMT. The consensus is for a 0.9% rise after a 5.5% decline in Q1.
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