The US Dollar may advance before this week’s top event risk including GDP and NFP releases as consumer confidence moves to a six-year high.
Talking Points:
US Dollar May Edge Higher as Consumer Confidence Hits Six-Year High
Australian Dollar Followed S&P 500 Futures Lower in Quiet Asian Trade View
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Another quiet day on the European economic data front is likely to see investors looking ahead to US economic news-flow. July’s Consumer Confidence reading is in focus, with expectations suggesting the index will rise to a six-year high of 85.4. The outcome may help to set the stage for an overstuffed week of high-profile US releases including the FOMC policy announcement, the second-quarter GDP reading and July’s Nonfarm Payrolls number.
The central object of speculation is the length of the time gap between October’s end of the Fed’s “QE3”stimulus program and the beginning of interest rate hikes. With that in mind, upbeat US economic outcomes are likely to support the view that tightening will materialize relatively sooner versus later, pushing the US Dollar higher. Needless to say, soft outcomes are likely to yield opposite result. We remain long the greenback against the Euro as well as the Canadian Dollar.
The Australian Dollar narrowly underperformed in otherwise quiet Asian trade, sliding 0.13 percent on average against its leading counterparts. The move lower tracked an overnight decline in S&P 500 index futures, hinting at eroding risk appetite as the catalyst behind selling pressure facing the sentiment-sensitive currency. Technical positioning warns the equities benchmark may be topping.
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