The Dollar & Yen rise as U.S consumer sentiment reduces risk appetite

The greenback and yen rose against most of their major counterparts after a report showed consumer confidence fell this month in the U.S., reducing demand for higher yields in other countries. The greenback advanced versus the euro on concern a rally in stocks and commodities can’t be sustained. The Conference Board’s consumer confidence index dropped to 47.7 in October from a revised 53.4 in the previous month, the New York-based research group reported today. The median forecast of 74 economists in a Bloomberg survey was for an advance to 53.5 from a previously reported 53.1. The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, rose for a fourth day, advancing to 76.20. The EUR/USD is currently trading at $1.4795 as of 20:17PM, GMT.

Sterling rose against the euro on Tuesday but wiped out earlier gains against the dollar, after surprisingly weak U.S. consumer confidence data pulled investors toward the liquidity and perceived safety of the U.S. currency. The greenback’s sharp rebound meant cable, fell more than a cent from levels reached earlier in the day, a rise in part fuelled by stronger than expected UK retail sales figures. That took the GBP/USD back below the technical support level of the 100-day moving average around $1.6360, while the euro's fall back toward $1.48 ensured the pound retained its earlier strength against the euro zone currency. Long-term investors, and Asian and Middle East reserve managers were noted buyers of sterling against the dollar earlier in the day, traders said, before the dollar bounced back. The GBP/USD is currently trading at $1.6375 as of 20:26PM, GMT.

Canada’s currency appreciated amid speculation its decline was too big to be sustained after it reached a key technical level. The Canadian dollar rose against all of the 16 most-traded currencies tracked by Bloomberg except the yen. It earlier was little changed as Bank of Canada Governor Mark Carney reiterated in testimony to lawmakers that a strong currency is a threat to the nation’s economic growth. “Longer-term, people are looking for areas to buy the Canadian dollar, so whenever you get significant resistance points you are going to see some buyers step in,” said Maria Jones, a currency trader in Toronto at TD Securities Inc., a unit of Canada’s second-biggest bank. The USD/CAD is currently trading at 1.0650 as of 20:35PM, GMT.