By CountingPips.com
The U.S. dollar has been on the rise in the forex markets today while U.S. stocks have taken a hit as investor risk aversion has been the dominant theme in the U.S. session today. A sharp decline in the Conference Board’s consumer confidence survey to its lowest point since April 2009 has contributed to a higher preference for the safe haven currencies (U.S. dollar, Japanese Yen) and less demand for the higher-yielding currencies as well as stocks and oil.
The dollar has been driven higher today versus the euro, Swiss franc, British pound, Canadian dollar, New Zealand dollar and the Australian dollar, according to currency data by Oanda at 2:17 pm EST. The dollar, meanwhile, has fallen versus the biggest beneficiary of risk averse sentiment, the Japanese yen.
The U.S. stock markets have had a negative trading session today with the Dow Jones falling by over 80 points, the Nasdaq decreasing over 20 points and the S&P 500 showing over a 10-point shortfall. Oil has declined by $1.33 to the $78.92 per barrel level while gold has been unchanged and trades around the $1112.60 per ounce level.
Consumer Confidence decreases in February Survey
Consumer confidence fell in February after increasing for three straight months, according to a report released today by the Conference Board, which produces the Consumer Confidence Index. In a survey of 5,000 households, the index showed that consumer confidence decreased by 10.5 points from 56.5 in January to standing at 46.0 in February. The Expectations index also fell in February to 63.8 from 77.3 in January while the Present Situation index declined from 25.2 in January to 19.4 in February.
The Director of the Conference Board Consumer Research Center Lynn Franco talked about the newest survey saying, “Consumer Confidence, which had been improving over the past few months, declined sharply in February. Concerns about current business conditions and the job market pushed the Present Situation Index down to its lowest level in 27 years (Feb. 1983, 17.5). Consumers’ short-term outlook also took a turn for the worse, with fewer consumers anticipating an improvement in business conditions and the job market over the next six months. Consumers also remain extremely pessimistic about their income prospects. This combination of earnings and job anxieties is likely to continue to curb spending.”
U.S. house prices see small gain in December
Home prices in the U.S. improved in December to show a small increase for the seventh straight month, according to the Standard & Poors/Case-Shiller Home Price Index released today. The S & P’s/Case-Shiller Index measures sales prices of existing single-family homes in major cities nationally. The report showed that the 20-city composite index increased by 0.3 percent in December on seasonally adjusted basis. On an annual basis, the 20-city composite fell by 3.1 percent in December from the December 2008 level.
David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s, commented on the report saying, “As measured by prices, the housing market is definitely in better shape than it was this time last year, as the pace of deterioration has stabilized for now. However, the rate of improvement seen during the summer of 2009 has not been sustained.”
USD/JPY 1-Hour Chart -The U.S. Dollar falling versus the Japanese Yen today in forex trading. The USD/JPY pair has leveled at the significant 90.00 psychological level after breaking below the recent supportive trendline earlier today.
